Back 17 years ago...
Dec 2017
The pace and breadth of NATO operations increased sharply in the aftermath of the terrorist attack on the United States on 11 September 2001. The following day NATO invoked Article 5 of the North Atlantic Treaty, which states that an armed attack against one or more of the Allies in Europe or North America shall be considered an attack against them all.
A concrete example of NATO assistance came with Operation EAGLE ASSIST in October 2001, when NATO Airborne Early Warning aircraft began assisting in monitoring the skies over North America. Between October 2001 and May 2002, 830 NATO NAEWF crew members flew more than 4,300 hours and over 360 operational sorties over the United States. An additional NATO response to the threat of terrorism began in late October, when a NATO naval operation – Operation ACTIVE ENDEAVOUR – began in the Eastern Mediterranean and subsequently expanded to provide safe passage for Allied shipping in the Straits of Gibraltar and operations throughout the Mediterranean. During this period the United States along with local Afghan forces succeeded in toppling the Taliban regime in Afghanistan, which had previously provided a safe haven for the Al Qaeda terrorist organisation. Afterward an International Security and Assistance Force (ISAF) was established in December 2001 to provide assistance in restoring stability and self-governance in the country, but initially this force was not under NATO command.
The pace and breadth of NATO operations increased sharply in the aftermath of the terrorist attack on the United States on 11 September 2001. The following day NATO invoked Article 5 of the North Atlantic Treaty, which states that an armed attack against one or more of the Allies in Europe or North America shall be considered an attack against them all.
A concrete example of NATO assistance came with Operation EAGLE ASSIST in October 2001, when NATO Airborne Early Warning aircraft began assisting in monitoring the skies over North America. Between October 2001 and May 2002, 830 NATO NAEWF crew members flew more than 4,300 hours and over 360 operational sorties over the United States. An additional NATO response to the threat of terrorism began in late October, when a NATO naval operation – Operation ACTIVE ENDEAVOUR – began in the Eastern Mediterranean and subsequently expanded to provide safe passage for Allied shipping in the Straits of Gibraltar and operations throughout the Mediterranean. During this period the United States along with local Afghan forces succeeded in toppling the Taliban regime in Afghanistan, which had previously provided a safe haven for the Al Qaeda terrorist organisation. Afterward an International Security and Assistance Force (ISAF) was established in December 2001 to provide assistance in restoring stability and self-governance in the country, but initially this force was not under NATO command.
U.S.: 35 Russian Diplomats Expelled, New Sanctions Announced
Dec 2016
The U.S. expelled 35 Russian diplomats Dec. 29 retaliation for alleged interference with the recent U.S. presidential election, BBC reported. It'll also close two Russian compounds useful as portion of a raft of other measures, in Maryland and New York, for intelligence gathering. Russia has denied any participation. The U.S. State Department has given the Russian diplomats and their families 72 hours to leave the state. The Russian government is expected to react in turn by expelling U.S. diplomats. Sanctions were also announced against nine entities and individuals including the Main Intelligence Directorate (GRU) and Federal Security Service (FSB) Russian.
The USA is not always the casualty of those approaches. Washington has frequently been accused of intervening, more and less overtly, in other nations' elections, most recently after the U.S. ambassador to the Philippines made critical comments about Rodrigo Duterte during his bid for office.
Along with trying to influence elections directly, foreign powers are always seeking internal information on candidates and parties that they'll use to anticipate shifts in U.S. policy or adapt their language and behavior to shape policies. Compared with older techniques such as wiretapping, bugging, breaking into offices or formulating ruses to ply info from insiders, cyber tools are not as speculative and way more expedient. They're also tougher to follow, further adding to the confusion.
Perhaps a more productive approach to gauge the accusations is from stolen or misplaced documents, or to ask a couple of different questions: Is hacking different from loose talk at a pub, from a disgruntled staff member's leak? Is political party staff member's or a campaign e-mail a national security issue or a matter of fundamental information management?
And, perhaps most important, are U.S. elections at substantial danger of authentic foreign exploitation, or are they only exposed to efforts at information-shaping? The latter we understand the best way to deal with. The former is a fundamental danger that merits dispassionate investigation.
It isn't clear whether President elect Donald Trump will be capable of immediately overturn the measures upon taking office in January. His policy on Russia will probably diverge from that of the Obama administration. As Trump sees the one-China policy as a relic of the Cold War worth revisiting, he intends to update Washington's relationship.
The U.S. expelled 35 Russian diplomats Dec. 29 retaliation for alleged interference with the recent U.S. presidential election, BBC reported. It'll also close two Russian compounds useful as portion of a raft of other measures, in Maryland and New York, for intelligence gathering. Russia has denied any participation. The U.S. State Department has given the Russian diplomats and their families 72 hours to leave the state. The Russian government is expected to react in turn by expelling U.S. diplomats. Sanctions were also announced against nine entities and individuals including the Main Intelligence Directorate (GRU) and Federal Security Service (FSB) Russian.
The USA is not always the casualty of those approaches. Washington has frequently been accused of intervening, more and less overtly, in other nations' elections, most recently after the U.S. ambassador to the Philippines made critical comments about Rodrigo Duterte during his bid for office.
Along with trying to influence elections directly, foreign powers are always seeking internal information on candidates and parties that they'll use to anticipate shifts in U.S. policy or adapt their language and behavior to shape policies. Compared with older techniques such as wiretapping, bugging, breaking into offices or formulating ruses to ply info from insiders, cyber tools are not as speculative and way more expedient. They're also tougher to follow, further adding to the confusion.
Perhaps a more productive approach to gauge the accusations is from stolen or misplaced documents, or to ask a couple of different questions: Is hacking different from loose talk at a pub, from a disgruntled staff member's leak? Is political party staff member's or a campaign e-mail a national security issue or a matter of fundamental information management?
And, perhaps most important, are U.S. elections at substantial danger of authentic foreign exploitation, or are they only exposed to efforts at information-shaping? The latter we understand the best way to deal with. The former is a fundamental danger that merits dispassionate investigation.
It isn't clear whether President elect Donald Trump will be capable of immediately overturn the measures upon taking office in January. His policy on Russia will probably diverge from that of the Obama administration. As Trump sees the one-China policy as a relic of the Cold War worth revisiting, he intends to update Washington's relationship.
The Brussels blasts are a striking reminder of the difficulty of preventing attacks against soft targets
22 March 2016
The deadly explosions at Brussels airport on March 22 were carried out by a suicide bomber, Belgium's prime minister said, Reuters reported, citing Belgian broadcasters VTM and RTBF. The combined death toll from the three explosions that hit Brussels has risen to at least 21, according to a spokesman for the Brussels fire brigade, including 10 in attack on the Brussels metro. Other reports have the death toll surpassing 30. Metro operator STIB reported that the metro blast alone killed 15 and injured another 55. Meanwhile, the Belgian government is reportedly deploying 225 extra troops to the city, Belga reported.
By definition, soft targets are those targets that are vulnerable to attack due to the absence of adequate security. Adequate security may be absent for a number of reasons, including disregard for the threat and lack of competent forces to conduct security, but most often soft targets are "soft" because of the sheer number of potential targets that exist and the impossibility of protecting them all. Even totalitarian police states have not demonstrated the capability to protect everything, so it is quite understandable that more liberal democratic countries do not possess the ability to provide airtight security for every potential target.
Unlike hard targets, which tend to require attackers to use large teams of operatives with elaborate attack plans or large explosive devices to breach defenses, soft targets offer militant planners an advantage in that they can frequently be attacked by a single operative or small team using a simple attack plan. In addition, attacks against transportation-related targets such as metro stations and airports allow attackers to kill large groups of people and attract significant media attention.
Militants have long targeted the soft area outside airports' security sectors. For example, a Palestinian militant group known as the Abu Nidal Organization attacked ticket desks in Rome and Vienna in December 1985, and a ticket desk at Los Angeles International Airport was attacked by a gunman in July 2002. In 2011, a bomb attack at Moscow's Domodedovo International Airport killed 35 people and injured more than 160. The departure and arrival areas outside of airport security usually provide a sizable pool of potential victims who can be attacked without having to sneak weapons past security. This is why travelers should minimize the time they spend on the "soft" side of the airport.
The deadly explosions at Brussels airport on March 22 were carried out by a suicide bomber, Belgium's prime minister said, Reuters reported, citing Belgian broadcasters VTM and RTBF. The combined death toll from the three explosions that hit Brussels has risen to at least 21, according to a spokesman for the Brussels fire brigade, including 10 in attack on the Brussels metro. Other reports have the death toll surpassing 30. Metro operator STIB reported that the metro blast alone killed 15 and injured another 55. Meanwhile, the Belgian government is reportedly deploying 225 extra troops to the city, Belga reported.
By definition, soft targets are those targets that are vulnerable to attack due to the absence of adequate security. Adequate security may be absent for a number of reasons, including disregard for the threat and lack of competent forces to conduct security, but most often soft targets are "soft" because of the sheer number of potential targets that exist and the impossibility of protecting them all. Even totalitarian police states have not demonstrated the capability to protect everything, so it is quite understandable that more liberal democratic countries do not possess the ability to provide airtight security for every potential target.
Unlike hard targets, which tend to require attackers to use large teams of operatives with elaborate attack plans or large explosive devices to breach defenses, soft targets offer militant planners an advantage in that they can frequently be attacked by a single operative or small team using a simple attack plan. In addition, attacks against transportation-related targets such as metro stations and airports allow attackers to kill large groups of people and attract significant media attention.
Militants have long targeted the soft area outside airports' security sectors. For example, a Palestinian militant group known as the Abu Nidal Organization attacked ticket desks in Rome and Vienna in December 1985, and a ticket desk at Los Angeles International Airport was attacked by a gunman in July 2002. In 2011, a bomb attack at Moscow's Domodedovo International Airport killed 35 people and injured more than 160. The departure and arrival areas outside of airport security usually provide a sizable pool of potential victims who can be attacked without having to sneak weapons past security. This is why travelers should minimize the time they spend on the "soft" side of the airport.
Whoever constructed the device on Daallo flight D159 managed to conceal military-grade TNT in an ordinary-looking laptop without arousing any suspicion when it went through the X-ray machine at Mogadishu airport
5 February 2016
Investigators have yet to trace the person responsible for building the explosive device on an Airbus 321 in Somalia, though notorious terrorist group al Shabaab has finally stepped up to claim responsibility for the attack.
That, and not the organization responsible, should be the authorities' focus as they uncover more details surrounding the explosion on Daallo flight D159.
The bombing on Daallo flight D159 was arguably a failure; though one passenger — likely the bomber — was killed, the aircraft landed safely after the attack Feb. 2. But if the flight's low altitude limited the bomb's effectiveness, that does nothing to change its level of sophistication.
Whoever constructed the device on Daallo flight D159 managed to conceal military-grade TNT in an ordinary-looking laptop without arousing any suspicion when it went through the X-ray machine at Mogadishu airport.
That is assuming there wasn't inside help involved: The Somali government released a video allegedly showing two airport employees handing the laptop to the bomber, in plain view of a CCTV camera. Either way, if the device had detonated at flight altitude, the initial explosion would likely have set off another blast in the fuel tank, which would undoubtedly have brought the entire plane down.
Investigators have yet to trace the person responsible for building the explosive device on an Airbus 321 in Somalia, though notorious terrorist group al Shabaab has finally stepped up to claim responsibility for the attack.
That, and not the organization responsible, should be the authorities' focus as they uncover more details surrounding the explosion on Daallo flight D159.
The bombing on Daallo flight D159 was arguably a failure; though one passenger — likely the bomber — was killed, the aircraft landed safely after the attack Feb. 2. But if the flight's low altitude limited the bomb's effectiveness, that does nothing to change its level of sophistication.
Whoever constructed the device on Daallo flight D159 managed to conceal military-grade TNT in an ordinary-looking laptop without arousing any suspicion when it went through the X-ray machine at Mogadishu airport.
That is assuming there wasn't inside help involved: The Somali government released a video allegedly showing two airport employees handing the laptop to the bomber, in plain view of a CCTV camera. Either way, if the device had detonated at flight altitude, the initial explosion would likely have set off another blast in the fuel tank, which would undoubtedly have brought the entire plane down.
Hungary’s air navigation service provider HungaroControl, with its research and development unit CRDS, will showcase its innovative technologies at the ATC Global in Dubai.
See you at Booth 7110 on 5-7 October, 2015!
October 2015
The present refugee crisis in Europe has frequently been presented as a fight between generous states (like Germany, which consented to choose a lot of asylum seekers) and self-centered states (most notably the Uk, which just reluctantly chose to accept more individuals). Nevertheless, the real demographic scenario in every country helps elucidate their behaviour.
September 2015 The crisis in Europe is performing more than driving wedges between European member-states -- nationwide demographics are also changing to another side of the Country. Individuals in the majority of Western states are currently growing and several will soon begin to reduce, getting fiscal difficulties to marketplaces. Moreover, it could open the door for governmental and social battle though immigration can help create financial development. And as Europe survives with its next major wave of migration in 1-5 years, these really problems are forcing european country to chew over changing their immigration procedures. The nation 's inhabitants may also become considerably elderly: during the exact same interval the old age dependency ratio (the percentage of individuals aged 65 and over compared with individuals between 15 and 64) will go from 36 percent to 59 percent, among the greatest in Europe. Because of this, the work force in Germany is projected to fall 25 percent. This may generate financial challenges including higher spending on health care and pensions. |
Iran continues to be in a position of relative weakness now, but that may alter. Already German and French ministers have indicated their intention to go to with Iran in the long run, plus they're going to not function as the sole significant representatives to go to Tehran.
July 2015
From Europe to Asia, Iran represents an important investment opportunity. In a decrepit state, just six states made more oil than Iran, even under a strict sanctions regime and in spite of its oil industry in 2014. The procedure has started, although it's going to take for the actual economic gains of sanction help to start to be felt in Iran.
Moreover, the conditions essential to project influence beyond its mountainous center for Iran are still set up. Illness reigns in the center of the Middle East, and Iran will make an effort to benefit from it. As long as Iraq is prone to dropping to forces hostile to Tehran, it's little choice.
Iran and america have converging interests. The growth of the Islamic State is not harmless to both, and heating relationships mean that Iran and the Us will occasionally see common cause. Nevertheless, the atomic price doesn't have anything related to Iranian state-sponsored terrorism or the proxies through the area in Iran. Those problems were deliberately separated in the nuclear discussions. The greatest dream in Iran continues to be to function as hegemon of the Middle East.
But it's a risk. Iran is not going to become a U.S. ally overnight. To the contrary, Iran will push against its interests when they clash with those of America. Stoke Shiite unrest and Tehran may also have to back Houthi rebels. In a nutshell, Iran wills certainly provoke into actions, not always co-operation.
The United States' R&D and operational edge with UAVs
March 2015
Drone usage is rapidly increasing throughout the world. From 2005 until present day, the number of countries operating these platforms nearly doubled. This trend is only going to continue, if not accelerate, but all drones are not created equal. There is a massive variation in physical structure, capabilities and the systems that these platforms operate within.
When most people hear the word drone, they commonly think of a U.S.-operated Predator and associate it with its targeted strike capabilities. This represents a very small niche in reality, and overlooks several key basic facts. First, "drone" is a colloquial term that has been widely adopted, but unmanned aerial vehicle (commonly shortened to UAV) is a more specific and accurate term.
Second, it is important to understand that UAVs are actually a subset of the broader category of unmanned vehicles that operate on land, below the ocean, on its surface and in space. So UAVs are currently the most prominent and advanced in military utility, but other subsets such as unmanned underwater vehicles are being developed, tested and adopted quickly into forces as well.
UAVs can be as small as an insect to as large as a 737 airliner, and their capabilities are nearly as diverse. ISR — intelligence, surveillance, and reconnaissance — continues to be the primary role for a majority of UAVs worldwide, but they can take on a wide array of other sensors and various munitions as well. As of now, the UAV’s primary advantage over modern military aircraft is its ability to loiter over a specific area for long durations. Most UAVs are slow, easy to see and nearly defenseless. They do not operate well in denied airspace.
UAV operations are all about data. Everything its sensors see must get to the controller, and every command the controller gives must get to the drone. Getting this data across space requires infrastructure. In its simplest form, this can be an advanced remote control, but this means you have a very limited operational range. In more advanced versions, portable ground stations can be set up with powerful transmitters and antennas that extend this reach. In the most advanced versions, complex data systems and space-based satellites can be networked and used to project data over vast distances.
UAVs also have to be forward deployed near potential target areas, need maintenance and require fuel like any other aircraft. This requires logistics networks and access to airfields. If one wants to have UAVs available all over the world, they need a global footprint. Most states are constrained in the range of their UAVs because they have a regional military presence at best. Only the United States has a truly global military footprint currently.
It is the combination of this global footprint, capable UAVs and a huge facilitating IT infrastructure that allows the United States to have the pre-eminent UAV system. No other country has this combination of abilities yet. So while many countries are now operating UAVs and drone sales have become a common part of arms deals, most are simple systems that are very limited. Some countries, most notably China, are quickly building out their UAV fleets and supporting infrastructure.
UAVs — and all unmanned systems, for that matter — are going to continue to play an ever-increasing role. The next big step is replacing some of the capabilities of current manned platforms, demonstrated by the recent test of the X-47B off of a carrier deck. As their utility has grown, designers have also started to build in better survivability traits, such as stealth, so they can operate in denied air space.
Other technologies are being pursued as well to make them even more efficient. One such example is the development of cooperative or swarm behavior. When it is finally completely functional, UAVs could be semi-autonomous in their actions while working in a group. This means a single operator could operate multiple vehicles while just giving them general directions.
In the future, mother ships, such as the newly retrofitted USS Ponce, could be sent to conflict zones, where they would launch and support fleets of unmanned vehicles with multiple capabilities. An entire battle group could be managed by a handful of personnel. In the meantime, UAVs will continue to become a staple of many countries' force structures.
Constraints for a Resolution in Ukraine
April 2014
There's a framework that has now been put in place in Geneva between the four players - United States, the EU, Russia and Ukraine. Let's see, what the reactions inside and outside of Ukraine can be to this.
Its notable that nobody has actually laid out what federalization would really look like. No draft legislation has been put in place. There's still a lot of disagreement even from within these pro-Russian eastern movements in Ukraine. From Russia's perspective, it is clear what it wants, which is that the government stays sort of checked, the Western-leaning aspects are checked and do factor in the interests of the east when it comes to things like language, when it comes to things like being able to elect their own governors.
However, now there is a framework in place and a discussion of giving more autonomy to the regions but no one knows what that means yet, and of course everyone in the east wants to talk about federalization where in Kiev they are starting to flirt with the idea of decentralization. And that's something that even Russian President [Vladimir] Putin said in his talk yesterday with the Russian people said that Russia was happy to even hear Kiev start to more toward that.
And, that's the really notable part of the agreement. Its not that it's necessarily going to change things right away on the ground but a framework has been set up over what a potential deal could look like. So from the Russian side of things obviously it is important that the Ukrainian government is neutralized or that it essentially does not move forward with its goals to integrate further with the West, with the EU, with NATO, and this decentralization move is a key aspect of this because it means it would give greater powers, greater say to the east, which would counter this Western integration drive. From the Ukrainian side of things, obviously their biggest concern is these pro-Russian militia groups in the east.
There's a framework that has now been put in place in Geneva between the four players - United States, the EU, Russia and Ukraine. Let's see, what the reactions inside and outside of Ukraine can be to this.
Its notable that nobody has actually laid out what federalization would really look like. No draft legislation has been put in place. There's still a lot of disagreement even from within these pro-Russian eastern movements in Ukraine. From Russia's perspective, it is clear what it wants, which is that the government stays sort of checked, the Western-leaning aspects are checked and do factor in the interests of the east when it comes to things like language, when it comes to things like being able to elect their own governors.
However, now there is a framework in place and a discussion of giving more autonomy to the regions but no one knows what that means yet, and of course everyone in the east wants to talk about federalization where in Kiev they are starting to flirt with the idea of decentralization. And that's something that even Russian President [Vladimir] Putin said in his talk yesterday with the Russian people said that Russia was happy to even hear Kiev start to more toward that.
And, that's the really notable part of the agreement. Its not that it's necessarily going to change things right away on the ground but a framework has been set up over what a potential deal could look like. So from the Russian side of things obviously it is important that the Ukrainian government is neutralized or that it essentially does not move forward with its goals to integrate further with the West, with the EU, with NATO, and this decentralization move is a key aspect of this because it means it would give greater powers, greater say to the east, which would counter this Western integration drive. From the Ukrainian side of things, obviously their biggest concern is these pro-Russian militia groups in the east.
Europeans do not feel as confident as Washington that losing Crimea is worth an escalation in tensions or a complete break in relations with Moscow, itself a significant partner
March 2014
Until now, Brussels and Washington have presented a united rhetorical front in condemning the Russian intervention in Crimea. But the stakes are not at all the same for the European Union and for the United States. Europe is much more vulnerable to Russian countermoves because of its strong economic ties to Moscow, whether related to Central Europe's dependence on Russian energy, Germany's large industrial investments in Russia or even the enormous amount of Russian capital flowing through London's financial district.
For its part, Washington sees an opportunity in the Ukrainian crisis to curb Russia's recent resurgence in its periphery and prove that it can be a dependable foreign policy ally to the sensitive nations of Central and Eastern Europe and the Caucasus. The United States additionally feels the burden of having to respond to the humiliation it incurred at the hands of Moscow during the Snowden affair and the near-fiasco of possible intervention into the Syrian civil war.
Reciprocally revoking travel visas and freezing foreign assets of medium-level officials has become an almost routine form of diplomatic exchange between the West and Russia in the past decade. The operating term had thus far been "medium-level." By targeting more important officials, Washington has raised the stakes in its diplomatic confrontation with Russia. However, it has done so because it believes it can afford the cost of whatever response Moscow can produce, which is almost assured to go beyond a simple reciprocal ban of officials.
The Europeans do not feel as confident as Washington that losing Crimea is worth an escalation in tensions or a complete break in relations with Moscow, itself a significant partner. The European Union's priority continues to be the management of its internal economic crisis. The more nuanced political relationship European powers like Germany and France have with Moscow makes it difficult for Brussels to match the aggressiveness of U.S. sanctions.
The rift between the interests of the United States and those of the European Union is likely to widen as the standoff with Russia continues. This particular round of sanctions will do little to sway Moscow's position regarding Crimea, and the West has already threatened additional sanctions as part of the ongoing negotiation process with Russia. However, it will be nearly impossible for common ground to be found between the United States and Europe on sanctions that carry real weight -- a division Moscow is sure to exploit to its advantage as it tries to regain influence in mainland Ukraine.
Until now, Brussels and Washington have presented a united rhetorical front in condemning the Russian intervention in Crimea. But the stakes are not at all the same for the European Union and for the United States. Europe is much more vulnerable to Russian countermoves because of its strong economic ties to Moscow, whether related to Central Europe's dependence on Russian energy, Germany's large industrial investments in Russia or even the enormous amount of Russian capital flowing through London's financial district.
For its part, Washington sees an opportunity in the Ukrainian crisis to curb Russia's recent resurgence in its periphery and prove that it can be a dependable foreign policy ally to the sensitive nations of Central and Eastern Europe and the Caucasus. The United States additionally feels the burden of having to respond to the humiliation it incurred at the hands of Moscow during the Snowden affair and the near-fiasco of possible intervention into the Syrian civil war.
Reciprocally revoking travel visas and freezing foreign assets of medium-level officials has become an almost routine form of diplomatic exchange between the West and Russia in the past decade. The operating term had thus far been "medium-level." By targeting more important officials, Washington has raised the stakes in its diplomatic confrontation with Russia. However, it has done so because it believes it can afford the cost of whatever response Moscow can produce, which is almost assured to go beyond a simple reciprocal ban of officials.
The Europeans do not feel as confident as Washington that losing Crimea is worth an escalation in tensions or a complete break in relations with Moscow, itself a significant partner. The European Union's priority continues to be the management of its internal economic crisis. The more nuanced political relationship European powers like Germany and France have with Moscow makes it difficult for Brussels to match the aggressiveness of U.S. sanctions.
The rift between the interests of the United States and those of the European Union is likely to widen as the standoff with Russia continues. This particular round of sanctions will do little to sway Moscow's position regarding Crimea, and the West has already threatened additional sanctions as part of the ongoing negotiation process with Russia. However, it will be nearly impossible for common ground to be found between the United States and Europe on sanctions that carry real weight -- a division Moscow is sure to exploit to its advantage as it tries to regain influence in mainland Ukraine.
The Jihadist Movement Suffers from Divisions and Discord
February 2014
By any means equating the global elite with jihadist ideologues. Indeed, jihadist ideologues have never subscribed to the universalistic ideas of the global elite. Instead, their philosophy is starkly dualistic, separating the world into two camps: Muslims and non-Muslims or, as they refer to them, Dar al-Islam (literally house of Islam) and Dar al-Harb (literally house of war). The jihadists believe in a form of Islamic millennialism whereby the Muslims will vanquish the non-Muslims in an apocalyptic struggle. Once they have won this battle, they will establish an earthly paradise ruled by Sharia in which the entire world lives in harmony under submission to Allah.
However, we are seeing the jihadist movement being wracked by the same types of forces that continue to impact all other human organizations, including the nation-state. Even within the Dar al-Islam that the jihadists are attempting to create, there remains a great deal of discord, dissention and death.
Dissention in Syria, Algeria and Somalia
Perhaps the best example of the divisions within the jihadist movement is on display in Syria. After helping establish Jabhat al-Nusra in Syria, Abu Bakr al-Baghdadi, the leader of the Islamic State of Iraq, announced in April 2013 that his group was subsuming Jabhat al-Nusra and would henceforth be known as the Islamic State in Iraq and the Levant. Al-Baghdadi obviously did not coordinate this hostile takeover with the leader of Jabhat al-Nusra, Abu Mohammad al-Golani, who appealed to al Qaeda leader Ayman al-Zawahiri for help. Al-Zawahiri ruled against al-Baghdadi and ordered him to cease operations in Syria, but al-Baghdadi rebelled and disregarded al-Zawahiri's orders. The group has now officially broken away from al Qaeda, and is currently fighting against Jabhat al-Nusra as well as other jihadist actors in Syria for control of the jihad in Syria. In addition to the personal struggle for power between al-Baghdadi and al-Golani, there is also a nationalistic aspect to the dispute, since some Syrians want to have a Syrian leader of the jihadist effort in that country rather than an Iraqi like al-Baghdadi.
On Feb. 23, Abu Khaled al-Suri, the head of the Syrian jihadist group Ahrar al-Sham, was killed by a suicide bombing in Aleppo. Al-Suri was also reportedly a senior al Qaeda member and close associate of al-Zawahiri and Osama bin Laden. Many believe the Islamic State in Iraq and the Levant killed al-Suri, but the group has denied responsibility.
Today, groups such as Jabhat al-Nusra and Ahrar al-Sham not only need to worry about fighting government forces, they also must combat the Islamic State in Iraq and the Levant. This infighting has provided a much-needed respite for the Syrian regime.
In early February, a jihadist group in the Gaza Strip published a video on YouTube in which it proclaimed allegiance to the Islamic State in Iraq and the Levant. Jihadists in Gaza are not new, and jihadists based in Iraq have long had links to Gaza and the Sinai Peninsula, but it was notable to see a Gaza-based group declare allegiance to the Islamic State in Iraq and the Levant rather than al Qaeda.
Another example of the divisiveness brought about by pride and personal ambition is the longstanding tension between Mokhtar Belmokhtar and his counterparts and organizational superiors in al Qaeda in the Islamic Maghreb's southern zone, as well as the group's leadership in northern Algeria. Al Qaeda in the Islamic Maghreb's Shura Council chastised Belmokhtar for his disdain and disrespect for the leadership in a letter sent to Belmokhtar and later recovered in northern Mali. Belmokhtar split from al Qaeda in the Islamic Maghreb in December of 2012 to form his own jihadist group.
Tribal politics, nationalism, ambition and personal conflicts have also factored into the development of the Somali jihadist group al Shabaab. In 2013, al Shabaab leader Ahmad Abdi Godane (also known as Abu Zubayr) began a purge of dissident leaders to tighten his control over the group. In the so-called Godane coup, his forces assassinated Ibrahim al-Afghani, a senior al Shabaab leader who had criticized Godane's leadership in an open letter. Godane's men also killed U.S. citizen Omar Hammami, also known as Abu Mansur al-Amriki, who Godane's forces had pursued for several months due to his criticism of Godane, along with a number of other foreign fighters. Following these killings, Sheikh Hassan Dahir Aweys, who led the Islamist militant group Hizbul Islam before joining al Shabaab, defected to the Somali government due to fear of Godane.
It is also widely believed that Godane orchestrated the June 2011 death of al Qaeda in East Africa leader Fazul Abdullah Mohammed due to Abdullah Mohammed's sharp criticism of al Shabaab's leadership. Some have also claimed that Godane got wind of a plan by al Qaeda to have Abdullah Mohammed (a Comoran) or other foreign al Qaeda leaders installed to lead al Shabaab. Either way, Abdullah Mohammed's criticism was very well documented in an autobiography he published on a jihadist website in 2009, and given how Godane has responded to others who have criticized his leadership, the biography clearly could have provided grounds for his "accidental" death.
By any means equating the global elite with jihadist ideologues. Indeed, jihadist ideologues have never subscribed to the universalistic ideas of the global elite. Instead, their philosophy is starkly dualistic, separating the world into two camps: Muslims and non-Muslims or, as they refer to them, Dar al-Islam (literally house of Islam) and Dar al-Harb (literally house of war). The jihadists believe in a form of Islamic millennialism whereby the Muslims will vanquish the non-Muslims in an apocalyptic struggle. Once they have won this battle, they will establish an earthly paradise ruled by Sharia in which the entire world lives in harmony under submission to Allah.
However, we are seeing the jihadist movement being wracked by the same types of forces that continue to impact all other human organizations, including the nation-state. Even within the Dar al-Islam that the jihadists are attempting to create, there remains a great deal of discord, dissention and death.
Dissention in Syria, Algeria and Somalia
Perhaps the best example of the divisions within the jihadist movement is on display in Syria. After helping establish Jabhat al-Nusra in Syria, Abu Bakr al-Baghdadi, the leader of the Islamic State of Iraq, announced in April 2013 that his group was subsuming Jabhat al-Nusra and would henceforth be known as the Islamic State in Iraq and the Levant. Al-Baghdadi obviously did not coordinate this hostile takeover with the leader of Jabhat al-Nusra, Abu Mohammad al-Golani, who appealed to al Qaeda leader Ayman al-Zawahiri for help. Al-Zawahiri ruled against al-Baghdadi and ordered him to cease operations in Syria, but al-Baghdadi rebelled and disregarded al-Zawahiri's orders. The group has now officially broken away from al Qaeda, and is currently fighting against Jabhat al-Nusra as well as other jihadist actors in Syria for control of the jihad in Syria. In addition to the personal struggle for power between al-Baghdadi and al-Golani, there is also a nationalistic aspect to the dispute, since some Syrians want to have a Syrian leader of the jihadist effort in that country rather than an Iraqi like al-Baghdadi.
On Feb. 23, Abu Khaled al-Suri, the head of the Syrian jihadist group Ahrar al-Sham, was killed by a suicide bombing in Aleppo. Al-Suri was also reportedly a senior al Qaeda member and close associate of al-Zawahiri and Osama bin Laden. Many believe the Islamic State in Iraq and the Levant killed al-Suri, but the group has denied responsibility.
Today, groups such as Jabhat al-Nusra and Ahrar al-Sham not only need to worry about fighting government forces, they also must combat the Islamic State in Iraq and the Levant. This infighting has provided a much-needed respite for the Syrian regime.
In early February, a jihadist group in the Gaza Strip published a video on YouTube in which it proclaimed allegiance to the Islamic State in Iraq and the Levant. Jihadists in Gaza are not new, and jihadists based in Iraq have long had links to Gaza and the Sinai Peninsula, but it was notable to see a Gaza-based group declare allegiance to the Islamic State in Iraq and the Levant rather than al Qaeda.
Another example of the divisiveness brought about by pride and personal ambition is the longstanding tension between Mokhtar Belmokhtar and his counterparts and organizational superiors in al Qaeda in the Islamic Maghreb's southern zone, as well as the group's leadership in northern Algeria. Al Qaeda in the Islamic Maghreb's Shura Council chastised Belmokhtar for his disdain and disrespect for the leadership in a letter sent to Belmokhtar and later recovered in northern Mali. Belmokhtar split from al Qaeda in the Islamic Maghreb in December of 2012 to form his own jihadist group.
Tribal politics, nationalism, ambition and personal conflicts have also factored into the development of the Somali jihadist group al Shabaab. In 2013, al Shabaab leader Ahmad Abdi Godane (also known as Abu Zubayr) began a purge of dissident leaders to tighten his control over the group. In the so-called Godane coup, his forces assassinated Ibrahim al-Afghani, a senior al Shabaab leader who had criticized Godane's leadership in an open letter. Godane's men also killed U.S. citizen Omar Hammami, also known as Abu Mansur al-Amriki, who Godane's forces had pursued for several months due to his criticism of Godane, along with a number of other foreign fighters. Following these killings, Sheikh Hassan Dahir Aweys, who led the Islamist militant group Hizbul Islam before joining al Shabaab, defected to the Somali government due to fear of Godane.
It is also widely believed that Godane orchestrated the June 2011 death of al Qaeda in East Africa leader Fazul Abdullah Mohammed due to Abdullah Mohammed's sharp criticism of al Shabaab's leadership. Some have also claimed that Godane got wind of a plan by al Qaeda to have Abdullah Mohammed (a Comoran) or other foreign al Qaeda leaders installed to lead al Shabaab. Either way, Abdullah Mohammed's criticism was very well documented in an autobiography he published on a jihadist website in 2009, and given how Godane has responded to others who have criticized his leadership, the biography clearly could have provided grounds for his "accidental" death.
Two years ago, GCC talked about setting a up missile shield – Strong message to allies, enemies
What was the plan? What happenned?
The Gulf Cooperation Council (GCC) countries wanted to set up and develop a missile defense shield whether the United States is behind it or not, or even with Iran’s strong objection, according to a defense analyst. Assaf Kfoury, general manager of Tactical Report, said in a telephone interview from his office in Lebanon that the GCC countries will set up a ballistic missile defense shield, although studies are not yet complete and specific dates have not been revealed...
“The GCC defense ministers agreed at the end of their meeting in Abu Dhabi to complete the studies to set up a missile shield against ballistic missiles,” he said.
By 2014, NATO came to realize the potential here. Developing a southern strategy will also require changes in NATO’s mindset and approach to crisis management. In the future, most crisis management operations involving NATO are likely to be undertaken by ad hoc coalitions of the willing rather than by NATO as a whole. These coalitions will include some key members of NATO as well as countries that are not members of the alliance.
This underscores the importance of having capable regional partners who can operate effectively with NATO forces and focus on programs like the ICI, which are designed to enhance interoperability between NATO and regional partners.
NATO should build on the readiness of the GCC countries to participate actively in NATO operations to expand and deepen cooperation with the GCC countries. There are several areas where cooperation could be increased.
The first can really be the missile defense launced two years ago. The prospect that Iran may acquire a nuclear arsenal in the not-too-distant future is likely to intensify the interest of the GCC countries in missile defense and other measures designed to reduce GCC states’ vulnerability to nuclear blackmail.
And how did it start?
Dr. Abdul Latif bin Rashid Al-Zayani, GCC Secretary-General, said during his keynote speech at the third edition of the Middle East Missile and Air Defence Symposium (Memad) in 2012 that building a comprehensive plan for a missile defense shield is an important strategy to protect GCC countries and that cooperation sends a strong message to both allies and enemies.
“In war time, the most important thing is a civil defence system. Our success will depend on the strength of our defenses. We hope all Gulf countries will be ready to cooperate to solve international and regional problems”.
The owner of the agency’s ‘Tactical Report’ who is also the provider of Intelligence on Middle East Energy and Defense Affairs, said the missile defense shield will serve as counter response to Iranian ballistic missiles.
“It is aimed to deter and not intimidate Iran. The missile shield is designed to defend, not to attack,” Kfoury explained. Iran’s Defense Minister Ahmad Vahidi said Iran strongly opposes a US-backed plan to build a missile defense shield within the Gulf States, Fars reported.
“This system is a plan of the US and Israel, and anyone who supports the plan is implementing the US and Israel’s plot,” Vahidi stated. Vahidi sharply criticized the US-backed missile defense project, saying that it is “against regional security.”
Washington is seeking to expand its missile defense shield within the Gulf States. U.S. Patriot missiles are already deployed in Saudi Arabia and the United Arab Emirates. The West accuses Iran of pursuing a secret nuclear weapons program, but Tehran insists it needs nuclear power solely to generate electricity.
US Secretary of State, Hillary Clinton, announced at the security forum in Riyadh earlier the idea of a missile defense shield in the six GCC states which include Saudi Arabia, Kuwait, Bahrain, Qatar, the United Arab Emirates and Oman.
The most important outcome of the session earlier was the decision to establish a common missile defense shield against Iran. “Saudi Arabia has first launched the project and Saudi Defense Minister, Prince Salman, is showing enthusiasm to go ahead with it. The UAE has already begun building its own shield with the THAAD program, and is waiting to link it to that of the GCC,” Kfoury said in 2012.
The Gulf Cooperation Council (GCC) countries wanted to set up and develop a missile defense shield whether the United States is behind it or not, or even with Iran’s strong objection, according to a defense analyst. Assaf Kfoury, general manager of Tactical Report, said in a telephone interview from his office in Lebanon that the GCC countries will set up a ballistic missile defense shield, although studies are not yet complete and specific dates have not been revealed...
“The GCC defense ministers agreed at the end of their meeting in Abu Dhabi to complete the studies to set up a missile shield against ballistic missiles,” he said.
By 2014, NATO came to realize the potential here. Developing a southern strategy will also require changes in NATO’s mindset and approach to crisis management. In the future, most crisis management operations involving NATO are likely to be undertaken by ad hoc coalitions of the willing rather than by NATO as a whole. These coalitions will include some key members of NATO as well as countries that are not members of the alliance.
This underscores the importance of having capable regional partners who can operate effectively with NATO forces and focus on programs like the ICI, which are designed to enhance interoperability between NATO and regional partners.
NATO should build on the readiness of the GCC countries to participate actively in NATO operations to expand and deepen cooperation with the GCC countries. There are several areas where cooperation could be increased.
The first can really be the missile defense launced two years ago. The prospect that Iran may acquire a nuclear arsenal in the not-too-distant future is likely to intensify the interest of the GCC countries in missile defense and other measures designed to reduce GCC states’ vulnerability to nuclear blackmail.
And how did it start?
Dr. Abdul Latif bin Rashid Al-Zayani, GCC Secretary-General, said during his keynote speech at the third edition of the Middle East Missile and Air Defence Symposium (Memad) in 2012 that building a comprehensive plan for a missile defense shield is an important strategy to protect GCC countries and that cooperation sends a strong message to both allies and enemies.
“In war time, the most important thing is a civil defence system. Our success will depend on the strength of our defenses. We hope all Gulf countries will be ready to cooperate to solve international and regional problems”.
The owner of the agency’s ‘Tactical Report’ who is also the provider of Intelligence on Middle East Energy and Defense Affairs, said the missile defense shield will serve as counter response to Iranian ballistic missiles.
“It is aimed to deter and not intimidate Iran. The missile shield is designed to defend, not to attack,” Kfoury explained. Iran’s Defense Minister Ahmad Vahidi said Iran strongly opposes a US-backed plan to build a missile defense shield within the Gulf States, Fars reported.
“This system is a plan of the US and Israel, and anyone who supports the plan is implementing the US and Israel’s plot,” Vahidi stated. Vahidi sharply criticized the US-backed missile defense project, saying that it is “against regional security.”
Washington is seeking to expand its missile defense shield within the Gulf States. U.S. Patriot missiles are already deployed in Saudi Arabia and the United Arab Emirates. The West accuses Iran of pursuing a secret nuclear weapons program, but Tehran insists it needs nuclear power solely to generate electricity.
US Secretary of State, Hillary Clinton, announced at the security forum in Riyadh earlier the idea of a missile defense shield in the six GCC states which include Saudi Arabia, Kuwait, Bahrain, Qatar, the United Arab Emirates and Oman.
The most important outcome of the session earlier was the decision to establish a common missile defense shield against Iran. “Saudi Arabia has first launched the project and Saudi Defense Minister, Prince Salman, is showing enthusiasm to go ahead with it. The UAE has already begun building its own shield with the THAAD program, and is waiting to link it to that of the GCC,” Kfoury said in 2012.
The Egyptian Military's Show of Force
Egyptian security forces early Aug. 14 proceeded with an operation to clear Muslim Brotherhood protests in Cairo. Beginning at dawn, Egyptian army and police used bulldozers to disperse thousands of protesters who had camped out for six weeks in Giza's Nahda Square and at the Rabaa al-Adawiya Mosque in Nasr City.
Casualty estimates vary widely depending on whether they are reported by state-run media, Muslim Brotherhood media or local observers. The state media so far claims a death toll of 13 (five of whom were security officers), with 98 injured, while the Muslim Brotherhood claims 500 dead and 9,000 injured. The operation at Nahda Square reportedly lasted three hours, while the crackdown at Rabaa al-Adawiya is still underway, with reports of clashes between security forces and protesters spreading throughout Cairo and to Alexandria and Aswan.
The military had said it would eventually clear the sit-ins with such an operation; it allowed for a weeklong diplomatic mediation and the Eid al-Fitr holiday to pass first. In sharp contrast to sit-in protests in Cairo's Tahrir Square, the Muslim Brotherhood protests were concentrated around the outskirts of Cairo and involved several thousand people. The military thus had the option of avoiding a deadly crackdown. It could have allowed the protests to languish, especially considering the Muslim Brotherhood was already facing a crisis of legitimacy among its own supporters. The military instead proceeded with a show of force designed to reinforce its credibility and demonstrate its intolerance of the street protest culture that has dominated Egypt for the past two years. The military would not have proceeded with this operation had it not felt itself capable of managing the fallout, but its credibility will still be challenged in the coming days and months.
State media reinforced the military's operation with reports that Muslim Brotherhood protesters carried weapons and launched deadly attacks on security forces and Coptic religious sites, among other allegations designed to brand the Islamist protests as militant in nature, emulating the Brotherhood's Palestinian counterparts, Hamas. Though many in Egypt are relieved to see the Muslim Brotherhood sidelined from power and are desperate to see the streets stabilized again to allow the economy to recover, the military-backed transitional government cannot escape the number of deep structural ailments afflicting Egypt -- including everything from the ongoing militancy in Sinai to a critical balance of payments crisis now impacting the supply of basic staples such as bread and fuel.
The military wanted to act quickly enough against the Muslim Brotherhood to demonstrate a show of force while it still had popular backing and while former Egyptian President Mohammed Morsi was still the primary public scapegoat for Egypt's crisis. The military will remain the ultimate authority of the state in Egypt, but it is only a matter of time before it takes the blame for Egypt's persistent economic and political turmoil. With chances for a political reconciliation now destroyed, political unrest propagated by Muslim Brotherhood supporters and jihadist violence will start to blur.
Casualty estimates vary widely depending on whether they are reported by state-run media, Muslim Brotherhood media or local observers. The state media so far claims a death toll of 13 (five of whom were security officers), with 98 injured, while the Muslim Brotherhood claims 500 dead and 9,000 injured. The operation at Nahda Square reportedly lasted three hours, while the crackdown at Rabaa al-Adawiya is still underway, with reports of clashes between security forces and protesters spreading throughout Cairo and to Alexandria and Aswan.
The military had said it would eventually clear the sit-ins with such an operation; it allowed for a weeklong diplomatic mediation and the Eid al-Fitr holiday to pass first. In sharp contrast to sit-in protests in Cairo's Tahrir Square, the Muslim Brotherhood protests were concentrated around the outskirts of Cairo and involved several thousand people. The military thus had the option of avoiding a deadly crackdown. It could have allowed the protests to languish, especially considering the Muslim Brotherhood was already facing a crisis of legitimacy among its own supporters. The military instead proceeded with a show of force designed to reinforce its credibility and demonstrate its intolerance of the street protest culture that has dominated Egypt for the past two years. The military would not have proceeded with this operation had it not felt itself capable of managing the fallout, but its credibility will still be challenged in the coming days and months.
State media reinforced the military's operation with reports that Muslim Brotherhood protesters carried weapons and launched deadly attacks on security forces and Coptic religious sites, among other allegations designed to brand the Islamist protests as militant in nature, emulating the Brotherhood's Palestinian counterparts, Hamas. Though many in Egypt are relieved to see the Muslim Brotherhood sidelined from power and are desperate to see the streets stabilized again to allow the economy to recover, the military-backed transitional government cannot escape the number of deep structural ailments afflicting Egypt -- including everything from the ongoing militancy in Sinai to a critical balance of payments crisis now impacting the supply of basic staples such as bread and fuel.
The military wanted to act quickly enough against the Muslim Brotherhood to demonstrate a show of force while it still had popular backing and while former Egyptian President Mohammed Morsi was still the primary public scapegoat for Egypt's crisis. The military will remain the ultimate authority of the state in Egypt, but it is only a matter of time before it takes the blame for Egypt's persistent economic and political turmoil. With chances for a political reconciliation now destroyed, political unrest propagated by Muslim Brotherhood supporters and jihadist violence will start to blur.
When Would Cyber War Lead to Real War?
When would attacks on satellites or computer networks justify retaliation with conventional weapons?
Gen. Martin Dempsey, the chairman of the Joint Chiefs of Staff, recently addressed this question at a forum at the Brookings Institute:
“[T]here is an assumption out there, I think, and I would like to disabuse you of it, that a cyber attack that had destructive effects would be met by a cyber response…That's not necessarily the case…And I think that what the president of the United States would insist upon, actually, is that he had the options and the freedom of movement to decide what kind of response we would employ. And that's why I say I don't want to have necessarily a narrow conversation about what constitutes war in cyber, because the response could actually be in…one of the other traditional domains.”
Translating this principle into practice, of course, would not be this simple. Although it is obvious that cross-domain responses would only be appropriate in extreme cases, U.S. officials would have to weigh scenario-specific considerations about effectiveness, attribution, proportionality, escalation and diplomacy. Whether they thought the attacks were the first stage of a larger conventional war plan would be an important factor, which speaks to the importance of U.S. discussions of cross-domain issues with China and Russia to reduce the risks of miscalculation and crisis instability.
Looking forward, analyzing potential responses to different types of space and cyber attacks in different contexts will be integral to maintaining a credible deterrence posture. In the meantime, Dempsey’s remarks are a valuable reality check to abstract discussions of wars unfolding entirely in outer space and between computers. Even in the unlikely event that offensive operations remain in these domains, the goal would be to influence events in the physical world. Attacks that unleash profound consequences will invite fierce retribution. That is a prudent rule of thumb for defense strategists -- and their adversaries -- in every country to keep in mind.
Gen. Martin Dempsey, the chairman of the Joint Chiefs of Staff, recently addressed this question at a forum at the Brookings Institute:
“[T]here is an assumption out there, I think, and I would like to disabuse you of it, that a cyber attack that had destructive effects would be met by a cyber response…That's not necessarily the case…And I think that what the president of the United States would insist upon, actually, is that he had the options and the freedom of movement to decide what kind of response we would employ. And that's why I say I don't want to have necessarily a narrow conversation about what constitutes war in cyber, because the response could actually be in…one of the other traditional domains.”
Translating this principle into practice, of course, would not be this simple. Although it is obvious that cross-domain responses would only be appropriate in extreme cases, U.S. officials would have to weigh scenario-specific considerations about effectiveness, attribution, proportionality, escalation and diplomacy. Whether they thought the attacks were the first stage of a larger conventional war plan would be an important factor, which speaks to the importance of U.S. discussions of cross-domain issues with China and Russia to reduce the risks of miscalculation and crisis instability.
Looking forward, analyzing potential responses to different types of space and cyber attacks in different contexts will be integral to maintaining a credible deterrence posture. In the meantime, Dempsey’s remarks are a valuable reality check to abstract discussions of wars unfolding entirely in outer space and between computers. Even in the unlikely event that offensive operations remain in these domains, the goal would be to influence events in the physical world. Attacks that unleash profound consequences will invite fierce retribution. That is a prudent rule of thumb for defense strategists -- and their adversaries -- in every country to keep in mind.
UK Military Saw More Suicides Than Combat Deaths in 2012
A total of 50 serving and veteran British soldiers committed suicide last year, more than were killed fighting the Taliban in Afghanistan, according to figures reported on Sunday.
The Ministry of Defense confirmed that seven serving soldiers killed themselves in 2012 and a further 14 died in suspected suicides, although inquests have not yet been held.
An investigation by the BBC found that at least 29 veterans also took their lives last year. There are no official figures.
A total of 40 British soldiers died in action in Afghanistan in the same period, while serving as part of a decade-long British deployment that reached 9,500 troops at its peak.
Relatives of those who killed themselves told the BBC the military should do more to tackle post-traumatic stress disorder (PTSD) and treat it like a physical injury.
One soldier who committed suicide, Dan Collins, had twice survived being shot in Helmand, was blown off his feet by a roadside bomb and then witnessed a close friend killed in front of him.
He was diagnosed with PTSD and given treatment, but after 10 months the army said he had recovered. He was later released back home and on New Year’s Eve 2011, he hanged himself.
BBC's Panorama programme recently found that more British servicemen and veterans took their own lives than died in combat in Afghanistan over the course of 2012.
According to the programme, 21 serving soldiers killed themselves last year, along with 29 veterans. In contrast, the death toll of British servicemen in Afghanistan was 44, of whom 40 died in action.
Some of the soldiers' families said the men did not get enough mental-health support from the government, while the British Ministry of Defence (MoD) called ever suicide a "tragedy."
The BBC obtained its research through a Freedom of Information request to the MoD.
The British government, unlike its American counterpart, does not record the suicide rate among veterans. But through intensive investigations, the BBC was able to independently established that at least 29 veterans took their own lives in 2012.
The British MoD said it was not prepared to talk about individual cases but has committed £7.4m to ensure there is extensive mental health support in place for every serviceman, currently serving as well as retired, who is in need.
The Ministry of Defense confirmed that seven serving soldiers killed themselves in 2012 and a further 14 died in suspected suicides, although inquests have not yet been held.
An investigation by the BBC found that at least 29 veterans also took their lives last year. There are no official figures.
A total of 40 British soldiers died in action in Afghanistan in the same period, while serving as part of a decade-long British deployment that reached 9,500 troops at its peak.
Relatives of those who killed themselves told the BBC the military should do more to tackle post-traumatic stress disorder (PTSD) and treat it like a physical injury.
One soldier who committed suicide, Dan Collins, had twice survived being shot in Helmand, was blown off his feet by a roadside bomb and then witnessed a close friend killed in front of him.
He was diagnosed with PTSD and given treatment, but after 10 months the army said he had recovered. He was later released back home and on New Year’s Eve 2011, he hanged himself.
BBC's Panorama programme recently found that more British servicemen and veterans took their own lives than died in combat in Afghanistan over the course of 2012.
According to the programme, 21 serving soldiers killed themselves last year, along with 29 veterans. In contrast, the death toll of British servicemen in Afghanistan was 44, of whom 40 died in action.
Some of the soldiers' families said the men did not get enough mental-health support from the government, while the British Ministry of Defence (MoD) called ever suicide a "tragedy."
The BBC obtained its research through a Freedom of Information request to the MoD.
The British government, unlike its American counterpart, does not record the suicide rate among veterans. But through intensive investigations, the BBC was able to independently established that at least 29 veterans took their own lives in 2012.
The British MoD said it was not prepared to talk about individual cases but has committed £7.4m to ensure there is extensive mental health support in place for every serviceman, currently serving as well as retired, who is in need.
Qatar’s Disastrous Bet on the Muslim Brotherhood
Qatar made a name for itself in recent years with its bold, headline-grabbing foreign policy. Among its many controversial moves, as I noted in earlier articles, none looked as risky as the decision to give strong support to the Muslim Brotherhood in the wake of the Arab uprisings. Now, with the Muslim Brotherhood out of power in Egypt, one of the potential downsides of that risk equation has materialized, leaving Doha at a foreign policy crossroads.
For Qatar, the turn of events in Egypt is the most significant, but it is only one in a series of recent reverses to Doha’s activist foreign policy agenda. Given the timing and magnitude of the crisis, it will inevitably push the emirate to urgently reassess its regional stance.
For Qatar, the turn of events in Egypt is the most significant, but it is only one in a series of recent reverses to Doha’s activist foreign policy agenda. Given the timing and magnitude of the crisis, it will inevitably push the emirate to urgently reassess its regional stance.
Possible Military Coup in Egypt
The deadline attached to the Egyptian military's ultimatum expired July 3, and it appears the military is removing President Mohammed Morsi from office to begin the plan that it leaked to the press on July 2. Morsi gave a defiant speech last night, saying that he would not give up his electoral legitimacy -- essentially forcing the military to choose between intervening and removing him directly or reaching some kind of compromise. It appears the former is in the process of happening, though it is still possible that the military could be engaging in a show of force to dramatically increase pressure on negotiations. The military could be using this brinksmanship to get the Muslim Brotherhood to adopt the "road map" the military released for the political future.
Al Masry Al Youm reported earlier that Muslim Brotherhood and Wasat party leaders had been banned from leaving the country and that it was likely the Egyptian intelligence service was involved in enforcing that ban. AFP reported that Egyptian security forces have imposed a travel ban on President Mohammed Morsi, Muslim Brotherhood chief Mohammed Badie and his deputy and main financier for the Muslim Brotherhood Khairat al-Shater. It is not clear whether the travel ban reports are true.
Earlier on July 3, Morsi repeated his offer to reshuffle his Cabinet and form an interim coalition government that would govern until new elections could be held and amendments could be made to the constitution. Morsi aide Essam el-Haddad posted on his Facebook page that a military coup was currently underway in the country, although Reuters reported that Morsi was still working at the Republican Guard barracks in Cairo. Al Arabiya reported that Morsi had been taken away by the military for his own protection, but those reports are as yet unconfirmed as well.
Ahram reported that the military is being deployed to locations that are known centers of pro-Morsi support. There have been pictures circulating on social media websites of armored personnel carriers moving into the area around Cairo University in Giza, where gunmen clashed with Muslim Brotherhood supporters late at night July 2, killing approximately 23 people. Ahram also reported that the military has deployed at Rabaa al-Adawiya Mosque, which has essentially been the center of the Muslim Brotherhood's pro-Morsi protests.
The deployment of the military and the rumors of Morsi being put under house arrest are ominous, but it is still unclear at this stage just how far the military will take this show of force. The military should make a statement soon that will offer more clarity on these developments. If indeed the military removes Morsi, it will face serious challenges in putting together a transitional authority inclusive of all sides, as the military stated was its desire. The Muslim Brotherhood, having waited so long to establish itself openly in politics, is likely going to engage in civil resistance, which will lead to violence if these preliminary indications of a coup come to fruition.
Al Masry Al Youm reported earlier that Muslim Brotherhood and Wasat party leaders had been banned from leaving the country and that it was likely the Egyptian intelligence service was involved in enforcing that ban. AFP reported that Egyptian security forces have imposed a travel ban on President Mohammed Morsi, Muslim Brotherhood chief Mohammed Badie and his deputy and main financier for the Muslim Brotherhood Khairat al-Shater. It is not clear whether the travel ban reports are true.
Earlier on July 3, Morsi repeated his offer to reshuffle his Cabinet and form an interim coalition government that would govern until new elections could be held and amendments could be made to the constitution. Morsi aide Essam el-Haddad posted on his Facebook page that a military coup was currently underway in the country, although Reuters reported that Morsi was still working at the Republican Guard barracks in Cairo. Al Arabiya reported that Morsi had been taken away by the military for his own protection, but those reports are as yet unconfirmed as well.
Ahram reported that the military is being deployed to locations that are known centers of pro-Morsi support. There have been pictures circulating on social media websites of armored personnel carriers moving into the area around Cairo University in Giza, where gunmen clashed with Muslim Brotherhood supporters late at night July 2, killing approximately 23 people. Ahram also reported that the military has deployed at Rabaa al-Adawiya Mosque, which has essentially been the center of the Muslim Brotherhood's pro-Morsi protests.
The deployment of the military and the rumors of Morsi being put under house arrest are ominous, but it is still unclear at this stage just how far the military will take this show of force. The military should make a statement soon that will offer more clarity on these developments. If indeed the military removes Morsi, it will face serious challenges in putting together a transitional authority inclusive of all sides, as the military stated was its desire. The Muslim Brotherhood, having waited so long to establish itself openly in politics, is likely going to engage in civil resistance, which will lead to violence if these preliminary indications of a coup come to fruition.
Redlines and the Problems of Intervention in Syria
I promised myself to write about the pros, but after the past years, I want to start with the cons of action in Syria.
The civil war in Syria, one of the few lasting legacies of the Arab Spring, has been under way for more than two years. There has been substantial outside intervention in the war. The Iranians in particular, and the Russians to a lesser extent, have supported the Alawites under Bashar al Assad. The Saudis and some of the Gulf States have supported the Sunni insurgents in various ways. The Americans, Europeans and Israelis, however, have for the most part avoided involvement.
Last week the possibility of intervention increased. The Americans and Europeans have had no appetite for intervention after their experiences in Afghanistan, Iraq and Libya. At the same time, they have not wanted to be in a position where intervention was simply ruled out. Therefore, they identified a redline that, if crossed, would force them to reconsider intervention: the use of chemical weapons.
There were two reasons for this particular boundary. The first was that the United States and European states have a systemic aversion to the possession and usage of weapons of mass destruction in other countries. They see this ultimately as a threat to them, particularly if such weapons are in the hands of non-state users. But there was a more particular reason in Syria. No one thought that al Assad was reckless enough to use chemical weapons because they felt that his entire strategy depended on avoiding U.S. and European intervention, and that therefore he would never cross the redline. This was comforting to the Americans and Europeans because it allowed them to appear decisive while avoiding the risk of having to do anything.
However, in recent weeks, first the United Kingdom and France and then Israel and the United States asserted that the al Assad regime had used chemical weapons. No one could point to an incidence of massive deaths in Syria, and the evidence of usage was vague enough that no one was required to act immediately.
In Iraq, it turned out there was not a nuclear program or the clandestine chemical and biological weapons programs that intelligence had indicated. Had there been, the U.S. invasion might have had more international support, but it is doubtful it would have had a better outcome. The United States would have still forced the Sunnis into a desperate position, the Iranians would have still supported Shiite militias and the Kurds would have still tried to use the chaos to build an autonomous Kurdish region. The conflict would have still been fought and its final outcome would not have looked very different from how it does now.
What the United States learned in Iraq, Afghanistan and Libya is that it is relatively easy for a conventional force to destroy a government. It is much harder -- if not impossible -- to use the same force to impose a new type of government. The government that follows might be in some moral sense better than what preceded it -- it is difficult to imagine a more vile regime than Saddam Hussein's -- but the regime that replaces it will first be called chaos, followed by another regime that survives to the extent that it holds the United States at arm's length. Therefore, redline or not, few want to get involved in another intervention pivoting on weapons of mass destruction.
Interventionist Arguments and Illusions
However, there are those who want to intervene for moral reasons. In Syria, there is the same moral issue that there was in Iraq. The existing regime is corrupt and vicious. It should not be forgotten that the al Assad regime conducted a massacre in the city of Hama in 1982 in which tens of thousands of Sunnis were killed for opposing the regime. The regime carried out constant violations of human rights and endless brutality. There was nothing new in this, and the world was able to act fairly indifferent to the events, since it was still possible to create media blackouts in those days. Syria's patron, the Soviet Union, protected it, and challenging the Syrian regime would be a challenge to the Soviet Union. It was a fight that few wanted to wage because the risks were seen as too high.
The situation is different today. Syria's major patron is Iran, which had (until its reversal in Syria) been moving toward a reshaping of the balance of power in the region. Thus, from the point of view of the American right, an intervention is morally required to confront evil regimes. There are those on the left who also want intervention. In the 1980s, the primary concern of the left was the threat of nuclear war, and they saw any intervention as destabilizing a precarious balance. That concern is gone, and advocacy for military intervention to protect human rights is a significant if not universal theme on the left.
The difference between right-wing and left-wing interventionists is the illusions they harbor. In spite of experiences in Afghanistan and Iraq, right-wing interventionists continue to believe that the United States and Europe have the power not only to depose regimes but also to pacify the affected countries and create Western-style democracies. The left believes that there is such a thing as a neutral intervention -- one in which the United States and Europe intervene to end a particular evil, and with that evil gone, the country will now freely select a Western-style constitutional democracy. Where the right-wing interventionists cannot absorb the lessons of Afghanistan and Iraq, the left-wing interventionists cannot absorb the lessons of Libya.
Everyone loved the fall of communism in Eastern Europe. What was not to like? The Evil Empire was collapsing for the right; respect for human rights was universally embraced for the left. But Eastern Europe was occupied by Josef Stalin in 1945 following domination and occupation by Adolf Hitler. Eastern Europeans had never truly embraced either, and for the most part loathed both. The collapse freed them to be what they by nature were. What was lurking under the surface had always been there, suppressed but still the native political culture and aspiration.
That is not what was under the surface in Afghanistan or Iraq. These countries were not Europe and did not want to be. One of the reasons that Hussein was despised was that he was secular -- that he violated fundamental norms of Islam both in his personal life and in the way he governed the country. There were many who benefited from his regime and supported him, but if you lopped off the regime, what was left was a Muslim country wanting to return to its political culture, much as Eastern Europe returned to its.
In Syria, there are two main factions fighting. The al Assad regime is Alawite, a heterodox offshoot of Shi'ism. But its more important characteristic is that it is a secular regime, not guided by either liberal democracy or Islam but with withering roots in secular Arab Socialism. Lop it off and what is left is not another secular movement, this time liberal and democratic, but the underlying Muslim forces that had been suppressed but never eradicated. A New York Times article this week pointed out that there are no organized secular forces in areas held by the Sunni insurgents. The religious forces are in control. In Syria, secularism belonged to the Baath Party and the Alawites, and it was brutal. But get rid of it, and you do not get liberal democracy.
This is what many observers missed in the Arab Spring. They thought that under the surface of the oppressive Hosni Mubarak regime, which was secular and brutal, was a secular liberal democratic force. Such a force was present in Egypt, more than in Syria, Iraq, Afghanistan or Libya, but still did not represent the clear alternative to Mubarak. The alternative -- not as clearly as elsewhere, but still the alternative -- was the Muslim Brotherhood, and no secular alternative was viable without the Egyptian army.
The Difficulties of an Intervention
There are tremendous military challenges to dealing with Syria. Immaculate interventions will not work. A surgical strike on chemical facilities is a nice idea, but the intelligence on locations is never perfect, Syria has an air defense system that cannot be destroyed without substantial civilian casualties, and blowing up buildings containing chemical weapons could release the chemicals before they burn. Sending troops deep into Syria would not be a matter of making a few trips by helicopter. The country is an armed camp, and destroying or seizing stockpiles of chemical weapons is complicated and requires manpower. To destroy the stockpiles, you must first secure ports, airports and roads to get to them, and then you have to defend the roads, of which there are many.
Eradicating chemical weapons from Syria -- assuming that they are all in al Assad's territory -- would require occupying that territory, and the precise outlines of that territory change from day to day. It is also likely, given the dynamism of a civil war, that some chemical weapons would fall into the hands of the Sunni insurgents. There are no airstrikes or surgical raids by special operations troops that would solve the problem. Like Iraq, the United States would have to occupy the country.
If al Assad and the leadership are removed, his followers -- a substantial minority -- will continue to resist, much as the Sunnis did in Iraq. They have gained much from the al Assad regime and, in their minds, they face disaster if the Sunnis win. The Sunnis have much brutality to repay. On the Sunni side, there may be a secular liberal democratic group, but if so it is poorly organized and control is in the hands of Islamists and other more radical Islamists, some with ties to al Qaeda. The civil war will continue unless the United States intervenes on behalf of the Islamists, uses its power to crush the Alawites and hands power to the Islamists. A variant of this happened in Iraq when the United States sought to crush the Sunnis but did not want to give power to the Shia. The result was that everyone turned on the Americans.
That will be the result of a neutral intervention or an intervention designed to create a constitutional democracy. Those who intervene will find themselves trapped between the reality of Syria and the assorted fantasies that occasionally drive U.S. and European foreign policy. No great harm will come in any strategic sense. The United States and Europe have huge populations and enormous wealth. They can, in that sense, afford such interventions. But the United States cannot afford continual defeats as a result of intervening in countries of marginal national interest, where it sets for itself irrational political goals for the war. In some sense, power has to do with perception, and not learning from mistakes undermines power.
Many things are beyond the military power of the United States. Creating constitutional democracies by invasion is one of those things. There will be those who say intervention is to stop the bloodshed, not to impose Western values. Others will say intervention that does not impose Western values is pointless. Both miss the point. You cannot stop a civil war by adding another faction to the war unless that faction brings overwhelming power to bear. The United States has a great deal of power, but not overwhelming power, and overwhelming power's use means overwhelming casualties. And you cannot transform the political culture of a country from the outside unless you are prepared to devastate it as was done with Germany and Japan.
There are places to go to war, but they should be few and of supreme importance. The United States, with its European allies, does not have the force needed to end Syria's bloodshed. If it tried, it would merely be held responsible for the bloodshed without achieving any strategic goal.
Why the Boston Bombers Succeeded
When seeking to place an attack like the April 15 Boston Marathon bombing into context, it is helpful to classify the actors responsible, if possible. Such a classification can help us understand how an attack fits into the analytical narrative of what is happening and what is likely to come. These classifications will consider factors such as ideology, state sponsorship and perhaps most important, the kind of operative involved.
In a case where we are dealing with an apparent jihadist operative, before we can classify him or her we must first have a clear taxonomy of the jihadist movement. We generally consider the jihadist movement to be divided into three basic elements: the al Qaeda core organization, the regional jihadist franchises, such as al Qaeda in the Arabian Peninsula, and grassroots operatives who are radicalized, inspired and perhaps equipped by the other two tiers but who are not members of either.
Within the three-tier jihadist movement there exist two distinct types of operatives. One of these is the professional terrorist operative, a person who is a member of the al Qaeda core or of one of the regional franchises. These individuals swear loyalty to the leader and then follow orders from the organization's hierarchy. Second, there are amateur operatives who never join a group and whose actions are not guided by the specific orders of a hierarchical group. They follow a bottom-up or grassroots organizational model rather than a hierarchical or top-down approach.
There is a great deal of variety among professional terrorists, especially if we break them down according to the functions they perform within an organization, roles including that of planners, finance and logistics specialists, couriers, surveillance operatives, bombmakers, et cetera. There is also a great deal of variety within the ranks of grassroots operatives, although it is broken down more by their interaction with formal groups rather than their function. At one end of the grassroots spectrum are the lone wolf operatives, or phantom cells. These are individuals or small groups that become radicalized by jihadist ideology but that do not have any contact with the organization. In theory, the lone wolf/phantom cell model is very secure from an operational security standpoint, but as we've discussed, it takes a very disciplined and driven individual to be a true lone wolf or phantom cell leader, and consequently, we see very few of them.
At the other end of the grassroots spectrum are individuals who have had close interaction with a jihadist group but who never actually joined the organization. Many of them have even attended militant training camps, but they didn't become part of the hierarchical group to the point of swearing an oath of allegiance to the group's leaders and taking orders from the organization. They are not funded and directed by the group.
Indeed, al Qaeda trained tens of thousands of men in its training camps in Afghanistan, Sudan and Pakistan but very few of the men they trained actually ended up joining al Qaeda. Most of the men the group instructed received basic military training in things like using small arms, hand-to-hand combat and basic fire and maneuver. Only the very best from those basic combat training courses were selected to receive advanced training in terrorist tradecraft techniques, such as bombmaking, surveillance, clandestine communications and document forgery. But even of the students who received advanced training in terrorist tradecraft, only a few were ever invited to join the al Qaeda core, which remained a relatively small vanguard organization.
Many of the men who received basic training traveled to fight jihad in Afghanistan, Bosnia and Chechnya or returned home to join insurgent or militant groups. Others would eventually end up joining al Qaeda franchise groups in places like Yemen, Iraq, Libya and Algeria. Still others received some basic training but then returned home and never really put their new skills into practice.
Most grassroots jihadists fall along a continuum that stretches between the lone wolf and someone who received advanced terrorist training but never joined al Qaeda or another formal militant group.
Whether the two men suspected of carrying out the April 15 Boston Marathon attack knowingly followed al Qaeda's blueprint for simple attacks by grassroots actors, their actions were fairly consistent with what we have come to expect from such operatives. Certainly based upon what we have seen of this case so far, the Tsarnaev brothers did not appear to possess sophisticated terrorist tradecraft.
For example, regarding the bombs employed in the attack and during the police chase, everything we have seen still points to very simple devices, such as pipe bombs and pressure cooker devices. From a bombmaking tradecraft standpoint, we have yet to see anything that could not be fabricated by reading Inspire magazine, spending a little bit of time on YouTube and conducting some experimentation. As a comparison, consider the far larger and more complex improvised explosive device Anders Behring Breivik, the Oslo bomber, constructed. We know from Breivik's detailed journal that he was a self-taught bombmaker using directions he obtained on the Internet. He was also a lone wolf. And yet he was able to construct a very large improvised explosive device. Also, although the Tsarnaev brothers did not hold up a convenience store as initially reported, they did conduct an express kidnapping that caused them to have extended contact with their victim while they visited automatic teller machines. They told the victim that they were the bombers and then allowed the victim to live. Such behavior is hardly typical of professional terrorist operatives.
Grassroots Theory
As it has become more difficult for professional terrorists to travel to the United States and the West in general, it has become more difficult for jihadist organizations to conduct attacks in these places. Indeed, this difficulty prompted groups like al Qaeda in the Arabian Peninsula to attempt to attack the United States by dispatching an operative with an underwear bomb and to use printer cartridge bombs to attack cargo aircraft. In response to this difficulty, al Qaeda in the Arabian Peninsula began to adopt the grassroots into their operational doctrine. They first began promoting this approach in 2009 in their Arabic-language magazine Sada al-Malahim. The al Qaeda core organization embraced this approach in May 2010 in an English-language video featuring Adam Gadahn.
In July 2010, al Qaeda in the Arabian Peninsula launched an English-language magazine called Inspire dedicated to radicalizing and equipping grassroots jihadists. Despite the losses that al Qaeda in the Arabian Peninsula has experienced on the battlefield, it has continued to devote a great deal of its limited resources toward propagating this concept. It has continued to publish Inspire even after the magazine's founder and editor, Samir Khan, was killed in an American missile strike in Yemen.
The grassroots strategy was perhaps most clearly articulated in the third edition of Inspire magazine, which was published in November 2010 following the failed October 29, 2010, printer bomb operation. In a letter from the editor in which Khan explained what he referred to as "Operation Hemorrhage," he wrote:
"However, to bring down America we do not need to strike big. In such an environment of security phobia that is sweeping America, it is more feasible to stage smaller attacks that involve fewer players and less time to launch and thus we may circumvent the security barriers America has worked so hard to erect. This strategy of attacking the enemy with smaller, but more frequent operations is what some may refer to the strategy of a thousand cuts. The aim is to bleed the enemy to death."
In Adam Gadahn's May 2010 message entitled "A Call to Arms," Gadahn counsels lone wolf jihadists to follow a three-pronged target selection process. They should choose a target with which they are well acquainted, a target that is feasible to hit and a target that, when struck, will have a major impact. The Tsarnaev brothers did all three in Boston.
Implications
Yet despite this clearly articulated theory, it has proved very difficult for jihadist ideologues to convince grassroots operatives to conduct simple attacks using readily available items like in the "build a bomb in the kitchen of your mom" approach, which they have advocated for so long.
This is because most grassroots jihadists have sought to conduct huge, spectacular attacks -- attacks that are outside of their capabilities. This has meant that they have had to search for help to conduct their plans. And that search for help has resulted in their arrest, just as Adam Gadahn warned they would be in his May 2010 message.
There were many plots disrupted in 2012 in which grassroots operatives tried to act beyond their capabilities. These include:
■On Nov. 29, 2012, two brothers from Florida, Raees Alam Qazi and Sheheryar Alam Qazi, were arrested and charged with plotting attacks in New York.
■On Oct. 17, 2012, Bangladeshi national Quazi Nafis was arrested as part of an FBI sting operation after he attempted to detonate a vehicle bomb outside New York's Federal Reserve Bank.
■On Sept. 15, 2012, Adel Daoud was arrested after he parked a Jeep Cherokee outside a Chicago bar and attempted to detonate the bomb he thought it contained. This was also an FBI sting operation.
But the carnage and terrorist theater caused by the Boston attack have shown how following the simple attack model can be highly effective. This will certainly be pointed out in future editions of Inspire magazine, and grassroots operatives will be urged to follow the model established by the Tsarnaev brothers. Unlike operatives like Faisal Shahzad who attempted to go big themselves and failed, the brothers followed the blueprint for a simple attack and the model worked.
It is quite possible that the success of the Boston bombing will help jihadist ideologues finally convince grassroots operatives to get past their grandiose plans and begin to follow the simple attack model in earnest. If this happens, it will obviously have a big impact on law enforcement and intelligence officials who have developed very effective programs of identifying grassroots operatives and drawing them into sting operations. They will now have to adjust their operations.
While these grassroots actors do not have the capability of professional terrorist operatives and do not pose as severe a threat, they pose a much broader, amorphous threat. Law enforcement and intelligence agencies generally do not deal well with ambiguity.
There are simply too many soft targets to protect and some of these simple attacks will inevitably succeed. This means that this low-level broad threat will persist and perhaps even intensify in the immediate future.
As we've previously discussed, the best defense against the grassroots threat are grassroots defenders. These include the police and alert citizens who report suspicious activity -- like people testing bomb designs -- a frequent occurrence before actual bomb attacks. The slogan "If you see something, say something," has been mocked as overly simplistic, but it is nonetheless a necessity in an environment where the broad, ambiguous threat of grassroots terrorism far outstrips the ability of the authorities to see everything. Taking a proactive approach to personal and collective security also beats the alternative of living in terror and apprehensively waiting for the next simple attack.
It is also very important for people to maintain the proper perspective on terrorism. Like car crashes and cancer and natural disasters, terrorism is part of the human condition. People should take prudent, measured actions to prepare for such contingencies and avoid becoming victims (vicarious or otherwise). It is the resilience of the population and its perseverance that will ultimately determine how much a terrorist attack is allowed to terrorize. By separating terror from terrorism, citizens can deny the practitioners of terror the ability to magnify their reach and power.
Jihadism: The Grassroots Paradox
Last week, rumors that Adam Gadahn had been arrested in Karachi, Pakistan, quickly swept through the global media. When the dust settled, it turned out that the rumors were incorrect; the person arrested was not the American-born al Qaeda spokesman. The excitement generated by the rumors overshadowed a message from Gadahn that the al Qaeda media arm as Sahab had released on March 7, the same day as the reported arrest. While many of the messages from al Qaeda figures that as Sahab has released over the past several years have been repetitive and quite unremarkable, after watching Gadahn's March 7 message, we believe that it is a message too interesting to ignore.
The Message
In the message, which was titled "A Call to Arms," Gadahn starts by telling jihadists to strike targets that are close to them. He repeats the al Qaeda doctrinal position that jihad is a personal, religiously mandated duty for every able-bodied Muslim. He then tells his audience that "it is for you, like your heroic Mujahid brother Nidal Hasan, to decide how, when and where you discharge this duty. But whatever you do, don't wait for tomorrow to do what can be done today, and don't wait for others to do what you can do yourself."
As the message progresses, Gadahn's praise of Fort Hood shooter Hasan continues. Gadahn lifts up Hasan as an example for other Muslims to emulate: "the Mujahid brother Nidal Hasan is a pioneer, a trailblazer and a role-model who has opened a door, lit a path and shown the way forward for every Muslim who finds himself among the unbelievers and yearns to discharge his duty to Allah." He adds that Hasan was the "ideal role model" for Muslims serving in the armed forces of Western countries and of their Muslim allies. Gadahn's message is clearly intended to encourage more jihadists to emulate Hasan and conduct lone wolf terrorist attacks.
Regarding the planning of such attacks, Gadahn praises Hasan for being a careful planner and for not engaging in a hasty, reckless or poorly planned operation. He states that Hasan clearly learned from the mistakes of others and did not repeat them. Although Gadahn does not specify particular plots in which he believes mistakes were made by grassroots jihadists, he is undoubtedly referring to cases such as the May 2009 arrest of a group of grassroots jihadists in White Plains, N.Y., who came to the attention of authorities when they sought help from a man who turned out to be an FBI informant. Gadahn praises Hasan for practicing careful operational security by keeping his plans to himself and for not discussing them over the phone or Internet. He also notes that Hasan did not make the mistake of confiding in a person who might have been an FBI informant, as several other plotters have done. Gadahn also says Hasan "didn't unnecessarily raise his security profile or waste money better spent on the operation itself by traveling abroad to acquire skills and instructions which could easily be acquired at home, or indeed, deduced by using one's own powers of logic and reasoning."
When discussing methods lone wolf jihadists can use to conduct their attacks, Gadahn notes that while Hasan used firearms in his assault at Fort Hood, jihadists are "no longer limited to bullets and bombs" when it comes to weapons. "As the blessed operations of September 11th showed, a little imagination and planning and a minimal budget can turn almost anything into a deadly, effective and convenient weapon which can take the enemy by surprise and deprive him of sleep for years on end."
Gadahn then turns his attention to targeting. He counsels lone wolf jihadists to follow a three-pronged target selection process. They should choose a target with which they are well acquainted, a target that is feasible to hit and a target that, when struck, will have a major impact. He notes that Hasan's choice of Fort Hood fit all three criteria, but that jihadists should not think that military bases are the only high-value targets in the United States or other Western countries. "On the contrary," Gadahn insists, "there are countless other strategic places, institutions and installations which, by striking, the Muslim can do major damage."
He then relates that jihadists must attempt to "further undermine the West's already-struggling economies" by carefully timed and targeted attacks against symbols of capitalism in an effort to "shake consumer confidence and stifle spending." (In this way, Gadahn's message tracks with past messages of Osama bin Laden pertaining to economic jihad.) Gadahn notes that even apparently unsuccessful attacks on Western mass-transportation systems can bring major cities to a halt, cost billions of dollars and send corporations into bankruptcy. He also calls upon jihadists to kill or capture "leading Crusaders and Zionists in government, industry and media."
To summarize his lessons on targeting, Gadahn urges jihadists to "look for targets which epitomize Western decadence, depravity, immorality and atheism -- targets which the enemy and his mouthpieces will have trouble trying to pass off to the conservative Muslim majority as illegitimate targets full of innocent people."
Implications
First, it is significant that Gadahn, a representative of the core al Qaeda group, is openly advocating a tactical approach to terrorist attacks that was first publicly laid out by the leader of one of the al Qaeda franchise groups. Nasir al-Wahayshi, head of al Qaeda in the Arabian Peninsula (AQAP), authored an article that appeared in AQAP's Sada al-Malahim online magazine in October 2009 that encouraged jihadists to conduct simple attacks with readily available weapons. Since that time, al-Wahayshi's group has been linked to Hasan and the Fort Hood shooting, the attempt to destroy Northwest Airlines Flight 253 on Christmas Day 2009 and the June 1, 2009, attack against an armed forces recruitment center in Little Rock, Ark. Normally it is the al Qaeda core group that sets the agenda in the jihadist realm, but the success of AQAP has apparently caused the core group to jump on the AQAP bandwagon and endorse al-Wahayshi's approach.
It is also telling that the core al Qaeda group chose to produce this particular video message using Gadahn as the spokesman and not one of their other talking heads like Ayman al-Zawahiri or Abu Yahya al-Libi. Gadahn, an American, is often used by the group to address the West, and English speaking-people in particular, so it is clear that the intended audience for his message was aspiring grassroots jihadists in the West. Indeed, Gadahn says in the video that his message is meant particularly for jihadists in the United States, United Kingdom and Israel. Presented in English, Gadahn's video is more easily accessible to English-speakers than al-Wahayshi's article, which was written in Arabic. Even though the al Qaeda core has been marginalized on the physical battlefield, when it comes to areas like militant philosophy, the pronouncements of the core group carry more influence with the wider jihadist world than statements from a regional franchise such as AQAP. When these two factors are combined, it is reasonable to assume that more people in the English-speaking world may pay attention to this call to simple attacks than they did to al-Wahayshi's call in October 2009. Video is also a more viral type of media than the printed word, and video messages are known to be very appealing to aspiring jihadists.
Another thing this video reveals is the continued weakening of the core al Qaeda group. It has come a long way from the early days of as Sahab, when bin Laden and other al Qaeda leaders issued defiant threats of launching a follow-on attack against the United States that was going to be even more destructive than 9/11. The group is now asking individual Muslims to conduct lone-wolf terrorist attacks and to follow the examples of Hasan and Mir Amal Kansi, the Pakistani citizen who conducted a shooting at a stoplight outside CIA headquarters in January 1993 that killed two CIA employees. Many have long been tracking the devolution of the jihadist threat from one primarily based upon al Qaeda the group to one based upon a wider jihadist movement, and this video is a clear indication that the trend toward decentralization is continuing.
This decentralization means grassroots operatives will continue to be a concern. The problems posed by such operatives are illustrated by recent cases involving American citizens like Colleen LaRose (aka Jihad Jane), Jamie Paulin-Ramirez and Sharif Mobley, who are all alleged to have been involved in recent jihadist plots. As blonde Caucasian women, LaRose and Paulin-Ramirez, in particular, do not fit the jihadist operative stereotype in most people's minds and serve to illustrate the difficulty of creating a terrorist profile based on race, ethnicity or gender.
But decentralization can also mean diminished capability. Counseling jihadists against traveling to training camps in places like Pakistan or Yemen and advising them not to coordinate their attacks with others will increase a group's operational security, but it can also have a serious impact on its operational effectiveness. Traditionally, one of the biggest problems for lone-wolf operators is acquiring the skills necessary to conduct a successful terrorist attack. Even though many Web sites and military manuals can provide instruction on such things as hand-to-hand combat and marksmanship, there is no substitute for hands-on experience in the real world. This is especially true when it comes to the more subtle skills required to conduct a complex terrorist attack, such as planning, surveillance and bomb making. This difficulty in translating intent into effective action explains why so few lone-wolf militants have been able to pull off spectacular, mass-casualty attacks.
Not putting their recruits through a more formal training regimen also makes it more difficult for groups to thoroughly indoctrinate recruits with jihadist ideology. In addition to physical training, individuals attending jihadist training camps typically receive hours of theological instruction every day that is intended to ground them in jihadist doctrine and motivate them to follow through with their plans to engage in attacks.
All that said, while the threat posed by grassroots jihadists is less severe than that posed by trained militant operatives from the core al Qaeda group or the regional franchises, grassroots operatives can still kill people -- and they most certainly will continue to do so. Because of this, it is important to pay careful attention to the targeting criteria that Gadahn lays out. His focus on mass transportation targets means that historical jihadist targets such as airliners and subways continue to be at risk. For corporate security directors and the protective security details assigned to safeguard high-profile government officials and private individuals, the video should also serve as a reminder of the need to be vigilant. This is doubly true for those assigned to protect individuals of the Jewish faith, who could be thought to fit both the "Crusader" and "Zionist" labels in the mind of a prospective attacker.
For security personnel, the silver lining in all this is that grassroots operatives are often lacking in street skills and tend to be very sloppy when conducting preoperational surveillance. This means that, while these individuals are in many ways more difficult to identify before an attack than operatives who communicate with, or are somehow connected to, jihadist groups (indeed, lone wolves can seemingly appear out of nowhere), their amateurish methods tend to make them more vulnerable to detection than their better-trained counterparts. This is the paradox presented by this class of militant operative -- and it is a paradox that will confront security, intelligence and law enforcement officers for many years to come.
For Boston Suspects, Was Chechnya’s Violent Past a Motive?
Grozny, the capital of Chechnya,
in 1996
As investigators hunt for evidence about the Boston bombing suspects, some of their questions – like the American public’s – will focus on Russia’s restive North Caucasus, including the war-scarred republic of Chechnya, a region that has produced a number of violent militant groups, but none that has been linked to terror attacks against the West.
The jumble of press and police reports from Russia and the United States suggests that the two suspects, identified by US security officials as Dzhokhar and Tamerlan Tsarnaev, 19 and 26 years old, respectively, hailed from a family of ethnic Chechens who fled the first war in their home republic in the mid-1990s. Afterward, they apparently lived in other parts of the former Soviet Union, also possibly Turkey, and came to the Massachusetts area sometime around 10 years ago.
There is no evidence linking the suspects to any established terror network – in fact, some security analysts have already said such a link is unlikely – but in piecing together their personal motivation, the metastasizing violence plaguing the North Caucasus over the past two decades may be a piece of the puzzle.
Known for deadly bombings and hostage-takings at home in Russia, the North Caucasus rebel movement dates back to the early 1990s when Chechnya attempted to break away from Moscow’s rule. Initially, the movement was a secular, separatist effort. After a botched and brutal military campaign by Russian troops in 1994-1996, the republic gained de-facto independence, but quickly descended into chaotic failed-state status.
In the meantime, radical Islam had started gaining popularity in a number of the region’s half dozen or so republics, especially among local young people seeking a counterweight against corrupt ruling elites and increasingly brutal law enforcers backed by the federal government in Moscow.
In Chechnya, local Islamist warlords began openly challenging the secular rule of President Aslan Maskhadov, elected after the cease-fire with Moscow.
In the second half of the 1990s, numerous reports and investigations pointed to ties between the Chechen rebels and a global jihadist effort, including future members of al-Qaida. Hundreds of transnational jihadists led by the Jordanian-born Emir Khattab travelled to Chechnya in 1995-1996 to support the separatists and remained there with the proclaimed aim of transforming the region into what they called an “emirate” and part of the “global jihad.”
In 1996, the current al-Qaida leader and Osama bin Laden’s then lieutenant, Ayman al Zawahiri, travelled to the North Caucasus to recruit supporters there, according to a 2002 Wall Street Journal investigation. He was detained, spent six months in a prison – for visa violations – in Dagestan, a predominantly Muslim-populated Russian region neighboring Chechnya, and then was released.
Moscow’s second war with Chechnya began after Islamist militants from the republic invaded Dagestan in August 1999. Press speculation about Moscow’s role in provoking the attack was rife at the time; nonetheless, it took a couple of years for the federal government to quash the insurgents by allying with several powerful Chechen strongmen. The son of one of them, Ramzan Kadyrov, is currently Chechnya’s leader and has been instrumental in helping Moscow establish control over the republic and keep the remaining Islamist fighters on the run.
In the late 1990s, the violent insurgency, once concentrated in Chechnya, started spreading to neighboring republics in southern Russia. Local Islamist networks emerged, with some developing into powerful terrorist organizations. The latest high-profile terrorist attacks in Russia – like the bombing of two Moscow metro stations in 2010 and of Moscow’s Domodedovo airport in 2011 – originated in Chechnya’s neighboring provinces, respectively, Ingushetia and Dagestan, where the Tsarnaevs reportedly lived for a time. Most of the violence, however, has been focused against local authorities in the North Caucasus republics themselves.
After the United States launched its “war on terror” in Afghanistan in the wake of the 9/11 bombings, media outlets and social networks were full of intense speculation about Chechen rebels fighting alongside the Taliban against US-led troops there. However, no Chechens have been encountered by reporters or researchers on the ground, and the handful of Russian nationals captured in Afghanistan and Pakistan and held for a time at the Guantanamo prison came from other Russian regions.
Chechen rebels have always concentrated their fight on Russia and have not proclaimed targets in the West.
However, in 2003 the US State Department included three rebel groups fighting in Chechnya on its list of international terrorist organizations, and then-U.S. Secretary of State Colin Powell designated Chechen rebel leader Shamil Basayev a threat to the security of the United States and to US citizens.
Powell, in a notice in the Federal Register, said Basayev "has committed, or poses a significant risk of committing, acts of terrorism" against US interests.
Basayev, killed in 2006, had been behind major terrorist attacks on Russian soil, including a 2002 mass hostage-taking in a Moscow theater and the 2004 siege of a school in Beslan, North Ossetia, which led to hundreds of deaths among civilians.
As recently as May 2011, the US State Department added the Islamic Caucasus Emirate, or Imarat Kavkaz, the biggest of the known Chechen rebel group, led by warlord Doku Umarov, to its list of terrorist organizations.
While there have been no proven reports about the involvement of fighters from the North Caucasus in terrorist attacks in the West, earlier this month the Syrian government included several of them in a list of foreign nationals killed in fighting there against government troops, which was handed over to the UN. And a Russian-language Islamist website calling on jihadists to take part in the fighting in Syria – and claiming that militants from the North Caucasus are already there – appeared online just last month.
The jumble of press and police reports from Russia and the United States suggests that the two suspects, identified by US security officials as Dzhokhar and Tamerlan Tsarnaev, 19 and 26 years old, respectively, hailed from a family of ethnic Chechens who fled the first war in their home republic in the mid-1990s. Afterward, they apparently lived in other parts of the former Soviet Union, also possibly Turkey, and came to the Massachusetts area sometime around 10 years ago.
There is no evidence linking the suspects to any established terror network – in fact, some security analysts have already said such a link is unlikely – but in piecing together their personal motivation, the metastasizing violence plaguing the North Caucasus over the past two decades may be a piece of the puzzle.
Known for deadly bombings and hostage-takings at home in Russia, the North Caucasus rebel movement dates back to the early 1990s when Chechnya attempted to break away from Moscow’s rule. Initially, the movement was a secular, separatist effort. After a botched and brutal military campaign by Russian troops in 1994-1996, the republic gained de-facto independence, but quickly descended into chaotic failed-state status.
In the meantime, radical Islam had started gaining popularity in a number of the region’s half dozen or so republics, especially among local young people seeking a counterweight against corrupt ruling elites and increasingly brutal law enforcers backed by the federal government in Moscow.
In Chechnya, local Islamist warlords began openly challenging the secular rule of President Aslan Maskhadov, elected after the cease-fire with Moscow.
In the second half of the 1990s, numerous reports and investigations pointed to ties between the Chechen rebels and a global jihadist effort, including future members of al-Qaida. Hundreds of transnational jihadists led by the Jordanian-born Emir Khattab travelled to Chechnya in 1995-1996 to support the separatists and remained there with the proclaimed aim of transforming the region into what they called an “emirate” and part of the “global jihad.”
In 1996, the current al-Qaida leader and Osama bin Laden’s then lieutenant, Ayman al Zawahiri, travelled to the North Caucasus to recruit supporters there, according to a 2002 Wall Street Journal investigation. He was detained, spent six months in a prison – for visa violations – in Dagestan, a predominantly Muslim-populated Russian region neighboring Chechnya, and then was released.
Moscow’s second war with Chechnya began after Islamist militants from the republic invaded Dagestan in August 1999. Press speculation about Moscow’s role in provoking the attack was rife at the time; nonetheless, it took a couple of years for the federal government to quash the insurgents by allying with several powerful Chechen strongmen. The son of one of them, Ramzan Kadyrov, is currently Chechnya’s leader and has been instrumental in helping Moscow establish control over the republic and keep the remaining Islamist fighters on the run.
In the late 1990s, the violent insurgency, once concentrated in Chechnya, started spreading to neighboring republics in southern Russia. Local Islamist networks emerged, with some developing into powerful terrorist organizations. The latest high-profile terrorist attacks in Russia – like the bombing of two Moscow metro stations in 2010 and of Moscow’s Domodedovo airport in 2011 – originated in Chechnya’s neighboring provinces, respectively, Ingushetia and Dagestan, where the Tsarnaevs reportedly lived for a time. Most of the violence, however, has been focused against local authorities in the North Caucasus republics themselves.
After the United States launched its “war on terror” in Afghanistan in the wake of the 9/11 bombings, media outlets and social networks were full of intense speculation about Chechen rebels fighting alongside the Taliban against US-led troops there. However, no Chechens have been encountered by reporters or researchers on the ground, and the handful of Russian nationals captured in Afghanistan and Pakistan and held for a time at the Guantanamo prison came from other Russian regions.
Chechen rebels have always concentrated their fight on Russia and have not proclaimed targets in the West.
However, in 2003 the US State Department included three rebel groups fighting in Chechnya on its list of international terrorist organizations, and then-U.S. Secretary of State Colin Powell designated Chechen rebel leader Shamil Basayev a threat to the security of the United States and to US citizens.
Powell, in a notice in the Federal Register, said Basayev "has committed, or poses a significant risk of committing, acts of terrorism" against US interests.
Basayev, killed in 2006, had been behind major terrorist attacks on Russian soil, including a 2002 mass hostage-taking in a Moscow theater and the 2004 siege of a school in Beslan, North Ossetia, which led to hundreds of deaths among civilians.
As recently as May 2011, the US State Department added the Islamic Caucasus Emirate, or Imarat Kavkaz, the biggest of the known Chechen rebel group, led by warlord Doku Umarov, to its list of terrorist organizations.
While there have been no proven reports about the involvement of fighters from the North Caucasus in terrorist attacks in the West, earlier this month the Syrian government included several of them in a list of foreign nationals killed in fighting there against government troops, which was handed over to the UN. And a Russian-language Islamist website calling on jihadists to take part in the fighting in Syria – and claiming that militants from the North Caucasus are already there – appeared online just last month.
Drone strikes in Syria? CIA ‘boosting’ intelligence force to ‘size up’ Syrian extremists
The CIA may be preparing for lethal drone strikes in Syria, as it is extending its intelligence-gathering on Islamic radicals in the country, US media has reported. At the same time, US officials are pressing for the supplying arms to rebels.
“The CIA has stepped up secret contingency planning to protect the United States and its allies as the turmoil expands in Syria, including collecting intelligence on Islamic extremists for the first time for possible lethal drone strikes,” according to current and former US officials, reported in the LA Times.
The agency’s counterterrorism center has recently transferred an unspecified number of targeting officers to the area. The center is notorious for its previous drone campaigns in Yemen and Pakistan.
Targeting officers are responsible for the compilation of large packages of information on specific zones. Those working on Syria are currently based at the organization’s headquarters in Langley, Virginia, as not many US operatives have been deployed to the area.
The increased focus on identifying threats in Syria carries the implication that the agency is preparing plans for counter-action – both violent and nonviolent – against potential militants, the Los Angeles Times reported.
“The CIA has stepped up secret contingency planning to protect the United States and its allies as the turmoil expands in Syria, including collecting intelligence on Islamic extremists for the first time for possible lethal drone strikes,” according to current and former US officials, reported in the LA Times.
The agency’s counterterrorism center has recently transferred an unspecified number of targeting officers to the area. The center is notorious for its previous drone campaigns in Yemen and Pakistan.
Targeting officers are responsible for the compilation of large packages of information on specific zones. Those working on Syria are currently based at the organization’s headquarters in Langley, Virginia, as not many US operatives have been deployed to the area.
The increased focus on identifying threats in Syria carries the implication that the agency is preparing plans for counter-action – both violent and nonviolent – against potential militants, the Los Angeles Times reported.
UN in Kosovo held responsible for failing to investigate forced disappearances
24 March 2013
In a landmark decision, the Human Rights Advisory Panel found UNMIK responsible for failing to investigate forced disappearances. With such competencies having now been transferred to other organizations and local authorities, however, this may prove to be too little, too late for the cause of accountability.
It is within this context that Ms. S.C. lodged her complaint. Ms. S.C. was the wife of Ah.C and mother of An.C. On the 18th July 1999, An.C and Ah.C. – while working at their family business in Prizren – were ordered by three uniformed Kosovo Liberation Army (KLA) members to follow them to do some work. The KLA members said they would be back within half an hour. Their bodies were recovered one year later, in August 2000, by ICTY investigators near the Prizren cemetery. It was only in 2003 that M.C., the other son of the complainant, received the bodies of his father and brother after UNMIK had issued confirmation of identity certificates.
In a landmark decision, the Human Rights Advisory Panel found UNMIK responsible for failing to investigate forced disappearances. With such competencies having now been transferred to other organizations and local authorities, however, this may prove to be too little, too late for the cause of accountability.
It is within this context that Ms. S.C. lodged her complaint. Ms. S.C. was the wife of Ah.C and mother of An.C. On the 18th July 1999, An.C and Ah.C. – while working at their family business in Prizren – were ordered by three uniformed Kosovo Liberation Army (KLA) members to follow them to do some work. The KLA members said they would be back within half an hour. Their bodies were recovered one year later, in August 2000, by ICTY investigators near the Prizren cemetery. It was only in 2003 that M.C., the other son of the complainant, received the bodies of his father and brother after UNMIK had issued confirmation of identity certificates.
From Myth to Symptom: The Case of Kosovo
22 March 2013
Agon Hamza and Slavoj Zizek’s book, “From Myth to Symptom: The Case of Kosovo,” initiates a delayed debate: Kosovo is independent, but what kind of independence is it? What are its contours, and what economic and political system is taking shape in this country? “From Myth to Symptom” deals with the mythologized perception of Kosovo as a place that suffers from historical hatred, a hatred that blocks its own progress.
“From Myth to Symptom” is a compilation of two essays, the first written by Zizek and the second by Hamza. Zizek describes the philosophical and ethical problems of NATO’s intervention in Kosovo, whereas Hamza discusses the myriad issues which make the true independence of Kosovo impossible. Zizek and Hamza present a strong argument against the “culturalization” of the Albanian-Serbian conflict by Western analysts and policy makers, arguing that in so doing the political and economic roots of the problem are minimized.
Agon Hamza and Slavoj Zizek’s book, “From Myth to Symptom: The Case of Kosovo,” initiates a delayed debate: Kosovo is independent, but what kind of independence is it? What are its contours, and what economic and political system is taking shape in this country? “From Myth to Symptom” deals with the mythologized perception of Kosovo as a place that suffers from historical hatred, a hatred that blocks its own progress.
“From Myth to Symptom” is a compilation of two essays, the first written by Zizek and the second by Hamza. Zizek describes the philosophical and ethical problems of NATO’s intervention in Kosovo, whereas Hamza discusses the myriad issues which make the true independence of Kosovo impossible. Zizek and Hamza present a strong argument against the “culturalization” of the Albanian-Serbian conflict by Western analysts and policy makers, arguing that in so doing the political and economic roots of the problem are minimized.
Fear, Gold, Inflation 'n' some charts
Political infighting in the United States and renewed debt concerns in Europe…
Just like in August 2011, that’s all it took to spark a 200-point, single-day plunge for the stock market and put a fire under the so-called 'fear index'.
Just like in August 2011, that’s all it took to spark a 200-point, single-day plunge for the stock market and put a fire under the so-called 'fear index'.
According to Goldman Sachs’ (GS) latest analysis of 13-F filings, hedge funds dumped their holdings in the most popular gold ETF, the SPDR Gold Trust (GLD). Even George Soros got in on the action.
Net-net, hedge fund exposure to gold via the ETF is down more than 50% over the last six months.
Speaking of gold, Fed Chairman Ben Bernanke got into a heated exchange with Senator Bob Corker (R-TN).
At one point he boasted, “My inflation record is the best of any Federal Reserve chairman in the post-war period, or at least one of the best.”
As Bespoke Investment Group points out, the price of gold has increased over 180% under Bernanke’s leadership, which “is more than double the return of gold under any of his three predecessors.”
At one point he boasted, “My inflation record is the best of any Federal Reserve chairman in the post-war period, or at least one of the best.”
As Bespoke Investment Group points out, the price of gold has increased over 180% under Bernanke’s leadership, which “is more than double the return of gold under any of his three predecessors.”
Could we see a revolt in Azerbaijan?
25 February 2013
Status: Azerbaijan is experiencing an unusual amount of unrest as protesters take a stance against corruption and challenge the authority of Azerbaijani strongman Ilham Aliyev, who has responded with a brute force that is likely to backfire and trigger a stronger protest momentum.
Bottom Line: A series of protests that turned violent in some areas and triggered a social-media-inspired solidarity response in Baku are first and foremost about corruption in a country whose immense oil riches have failed to trickle down to the general population. With presidential elections set for October 2013, Azerbaijan should be monitored for increasing signs of potential revolt and destabilization similar to that seen across the Middle East.
Analysis: For four weeks, protests have continued, on and off. While the authorities are quick to insist that these protests are not specifically targeting the rule of Ilham Aliyev and his cult of personality, they are anti-regime in nature because they focus almost singularly on corruption. The opposition political parties may see a window of opportunity to better organize and expand their power base with the intensifying protests. The protest movement is being led so far by young urban residents who are using social media to organize effectively. Importantly, 40% of Azerbaijan’s population is under 24 years old and social media is their key tool. It is also a major target for attack by the authorities, who recognize the risk, targeting bloggers and social media “activists” with arrests and fines.
JAL Is Back After Bankruptcy And Makeover
20 September 2012
Before Kazuo Inamori, founder of electronics firm Kyocera, was brought in as chairman of bankrupt Japan Airlines in 2010 he avoided flying on the carrier because he thought the service was bad.
"I really hated JAL," the 80-year old Inamori, who is now chairman emeritus, told Japanese television in June. "JAL was arrogant and didn't care about its customers."
As much as JAL has focused on cutting costs, it has also sought to close the service gap with local rival All Nippon Airways - putting in new seats, revamping in-flight menus and installing electronic toilet seats in some business and first class cabins.
That investment underscores JAL's belief that customers will pay a premium for full-service flights, including on shorter domestic routes even as low-cost carriers are expected to grow their share of Japan's market from just under 10 percent now.
"A lot of airlines, when they restructure, they go down more the low-cost route or just strip back on service. But they (JAL) actually did it by going upmarket," said Paul Sheridan, head Asia consultant at aviation advisory firm Ascend.
Now, less than three years after failing in one of Japan's biggest bankruptcies, JAL is set for a strong return to the stock market on Wednesday, highlighting the success of a swift but controversial state-led restructuring.
Everything about its collapse and revival has been big.
Its USD$8.5 billion initial public offering is the world's second largest this year. JAL's USD$2.5 billion operating profit in the past business year was top-of-the-class, and its balance sheet, saddled with USD$25 billion in debts when it failed in January 2010, has been wiped clean.
While the outlook for the former national flag carrier remains fraught - a mature home market, more competition from budget carriers and a shaky global economy that could dent its international expansion plans - investors appear willing to take a bet on its prospects.
A conservatively priced offering was comfortably oversubscribed and unofficial, pre-listing trading suggests a 10 percent first day "pop" above the IPO price.
"They've given themselves the best start they could. The challenge is to keep it up," said Ascend's Sheridan.
BUMPER PAYBACK
The Enterprise Turnaround Initiative Corporation of Japan, a state-backed fund that injected JPY¥350 billion (USD$4.44 billion) into JAL in 2010, sold its entire 96.5 percent stake in the IPO, generating around USD$4 billion profit for national coffers.
The IPO price of JPY¥3,790 a share values Japan Airlines at JPY¥687 billion (USD$8.72 billion) and marks it with a price-to-earnings ratio of 5.3, around a third of the industry average.
The underwriters, led by global co-ordinator Daiwa Securities Group, left some money on the table to ensure the listing, which came at a difficult time for the airline industry, went without a hitch.
JAL shares traded at JPY¥4,150 on the unofficial grey market on Tuesday, 9.5 percent above the IPO price, traders said. "We're pretty negative on the airline industry as a whole. There's so much new competition, low-cost carriers, and the outlook is pretty tough," said one Tokyo-based analyst, who asked not to be named. "But this thing looks like it's priced to go."
HELD ACCOUNTABLE
While it has invested in improving its service credentials, JAL has also taken a knife to its bloated cost structure - shedding about a third of its workforce to around 31,000, slashing pension payouts and retiring its line-up of gas-guzzling jumbo jets.
JAL's cost per available seat kilometre (CASK) has dropped to JPY¥11.4 (USD$0.14) from ¥13.8 before bankruptcy. ANA's CASK is ¥12.9.
JAL executives credit Inamori's management system in which individual corporate units are held accountable for maximising profitability - even divisions that are not directly generating revenue - for reviving the group.
Under that system unit leaders meet once a month to share cost-saving ideas and competitive intelligence, and are directed to put that information to work immediately. Previously JAL's various divisions operated in silos and many gave little thought on how best to minimise costs, executives have said.
CONTROVERSY, RISKS
The question that came up most often from institutional investors during an overseas tour to market the IPO was whether JAL could maintain its cost discipline after becoming a private company again, according to a person familiar with the matter.
While JAL estimates that three-quarters of its efficiency gains are due to job cuts and other structural reforms, its jump from industry basket-case to profit leader would not have been possible without massive state and private aid.
Banks forgave about JPY¥520 billion in debt. The write-down of its ageing fleet has put a huge dent in its depreciation expenses. Perhaps most significantly, it is sitting on JPY¥1.1 trillion in loss carry-forwards, which could translate into a USD$4.5 billion corporate tax break stretched over nine years.
JAL has used its new-found financial muscle to order 45 Boeing 787 Dreamliners, positioned as crucial in its efforts to trim costs and increase seat capacity on international routes by 25 percent over five years.
ANA has cried foul, charging the tax breaks and other aid have created an unfair playing field. Behind the scenes it has lobbied for concessions, such as preferential allocation of landing slots coming due at Tokyo's Haneda airport around 2014.
Analysts cite this issue as a risk for investors.
The main opposition Liberal Democratic Party, keen to criticise the ruling Democratic Party's restructuring of JAL, has called for steps to keep JAL's resurgence in check.
But the overriding fear among investors is that the carrier could slide back into its bad old ways.
"I believe JAL executives and employees will keep working hard, not becoming satisfied or complacent," Inamori told a briefing last month. "It won't be like the old JAL."
The UK could face a growing threat from "lone wolf" terrorists returning from fighting overseas
8 February 2012
The UK could face a growing threat from "lone wolf" terrorists returning from fighting overseas in the next few years, a think tank has warned.
The Royal United Services Institute estimates about 50 Britons are fighting with Somali extremists al-Shabab.
Returnees from "wars in Somalia, Yemen or Nigeria" could use their experience on UK streets, RUSI said.
The Home Office said its security arrangements would reflect "the nature of the terrorist threat we face".
It is also feared that the return of Britons from overseas could coincide with the release of people convicted of terrorist charges over the last decade.
China now has five SWFs and is reportedly considering establishing a sixth
February 2012
In terms of overseas investment, the key player is China Investment Corp. (CIC), established in 2007 to manage a portion of China’s forex reserves under the supervision of the Ministry of Finance.
With assets of $410 billion and a global portfolio acquired in double-quick time, CIC has been a primary actor in China's global economic re-emergence. But its growth has been accompanied by persistent doubts over the management and purpose of the fund.
As with other Asian investors, Chinese SWFs have a clear preference for fixed asset investment, particularly in the real estate, energy, utilities and commodities sectors -- an investor profile that increases the strategic sensitivity of many of their dealings. But with Western asset owners ever more obliged to listen to offers, even for core-type assets, and the Chinese funds growing in both size and credibility, there has been a qualitative improvement in the profile of successful deals in the past year. This evolution was most recently underlined by CIC's purchase of an 8.7 percent stake in British utility Thames Water -- generally regarded as a “hard-to-get” asset -- from a major Western player, Spain's Banco Santander.
US foreign policy & positions
December 2011
The Obama administration seemed to have a chance three years ago to repair America’s relationships with other key powers in the world. While some successes were achieved in 2009 and 2010, Washington closes out 2011 facing the reality of simultaneously deteriorating relationships with China, Pakistan, Saudi Arabia and Russia.
At the same time, Washington can expect only limited support from its major Western allies in managing many of today's global hotspots, as the ongoing eurozone crisis has, in a matter of months, turned European attention away.
Furthermore, the late-November firefight between NATO and Pakistani forces that left 24 Pakistani soldiers dead on the Afghanistan-Pakistan border has further damaged a U.S.-Pakistan relationship already under serious strain in the aftermath of the operation that killed Osama bin Laden.
In response to the latest incident, Pakistan closed overland supply routes to Afghanistan and ordered U.S. personnel to vacate the strategic Shamsi base, which had been a key facility for directing the ongoing drone campaign that has so decimated al-Qaida’s leadership in the past year. Indeed, officials on both sides now acknowledge that “the relationship is the worst it has ever been.”
Southwest goes for the MAX
December 2011
Southwest Airlines, the largest Boeing 737 customer, announced this week that it has signed up for 150 Boeing 737 MAX aircraft, and will become the type’s launch customer.
The airline placed firm orders for 150 Boeing 737 MAXs, and also took options on 150 more. At the same time, Southwest also ordered 58 more 737NGs, adding into the 142 it already has on order. The new order, valued at USD19 billion (at list prices), is the largest in Boeing’s history and breaks the record USD18 billion order which Emirates set just over a month ago. Southwest now has 350 firm orders for the Boeing 737 family to continue till 2022.
Southwest has also converted all of its 737-700 deliveries scheduled for 2012 and 2013 to the larger, but lower in CASK, 737-800 variant.
Southwest was also the launch customer for the Boeing 737NG, the first re-engining for the world’s best selling jet since 1967.
Banks short of capital with an estimated EUR 354 billion due to Basel III
December 2011
The world’s largest banks need to collect 354 billion euros in order to conform to the standards third Basel (Basel III) according to a study of U.S. Boston Consulting Group (BCG). The experts took as a basis for calculations the level of capital at the end of 2010.
Deficiency of European banks was estimated at 221 billion euros, of which 20 percent must be covered this year. Lack of financial sectors in Asia and the U.S. was estimated at 70 billion dollars each.
In the middle of last month’s European Banking Management (EBA) estimated the deficit in the EU financial sector 114.7 billion euros, while in late October, the lack of capital was estimated at 106 billion euros. At the same time regulator advised to increase capital by 200 billion euros in case of crisis.
At the moment, Basel requires banks have capital adequacy ratio of 8 percent. At the end of October this year, EU leaders decided to raise the minimum capital adequacy ratio to 9 percent. Finorganizatsiyam need to find additional funds by July of next year.
Third, Basel, approved late last year, increases the minimum capital adequacy ratio to 9.5 percent. Basel III norms will gradually put into practice in 2013.
From administrators to leaders
December 2011
With even Malaysia Airlines preparing for further restructuring, these lines from Idris Jala may still seem relevant for MAS but also other airlines...
'We do not want ‘administrators’ to take up leadership positions. We want only leaders who deliver breakthrough performance such as turning around an unprofitable route, substantially increasing yield, dramatically improving on-time performance, or significantly improving fuel efficiency.
There could be these types of leaders at every level of MAS today, and we will create more room for this exceptional talent to step-up and deliver breakthrough results—regardless of their seniority, education or background.'
Delta invests in GOL
December 2011
In a significant strategic investment move for a US carrier, Delta Air Lines has announced that it will be investing up to USD100m for a minority stake in Brazilian hybrid Low Cost carrier GOL. GOL has already signed a binding agreement involving the transaction.
This signals a move away from the traditional US major airline thinking for Delta and may become a step that will further solidify Delta’s strong financial performance in recent years. Delta has already invested in Mexican national carrier Aeromexico.
Gol, while surrounded by some safety issues a few years ago, has however been growing very successfully and purchased the Brazilian national carrier Varig sometime ago.
Present Brazilian regulations do not allow a foreign company to own more than 20% of a Brazilian airline – but a new amendment increasing this limit to 49% is pending.
In the news of this move which will likely strengthen both Delta’s and Gol’s long term stability, the share values of both airlines increased by 1.65% and 5.26% respectively.
The South American Southwest
10 February 2011 Kovacs Attila Mate
The clever airline
Founded in 2000 and based in São Paulo, Gol Linhas Aereas Inteligentes (NYSE:GOL) is Brazil’s second largest carrier, sporting 39.5% market share.
You could think of it as the Southwest Airlines of Latin America. The company operates passenger and cargo air transportation under five brands – GOL, Varig, Gollog, VoeFácil, and Smiles (the frequent flyer program) – and also provides charter airplane services.
With a fleet of more than 110 Boeing 737 Next Generation aircrafts, Gol offers 900+ daily flights to 52 destinations, connecting all the important cities in Brazil and 13 major destinations in South America and the Caribbean. From the outside it may seem strange (and limiting) to own of fleet of more than 100 identical planes – but it’s actually very smart business.
By having only one type of plane in its fleet, management cuts down on repair and re-routing costs. Airport hubs need only supply a single model’s maintenance and replacement parts; mechanics need only to learn to repair and maintain one model; and pilots can easily be switched to new planes when travel delays leave empty planes in airports while they wait for a crew on incoming flights that are stranded due to weather conditions. (That’s something travelers in the United States have experienced in spades so far this winter!) You can start to see why the company’s name is Portuguese for “Gol Intelligent Airlines…”
An Amazing Growth Story
On January 17, 2011, the company completed 10 years of operation, over which time it carried more than 160.5 million passengers. That’s one amazing growth story, considering the company started with a fleet of only six planes.
Between 2001 and 2009, the company generated average revenue growth of 59.12% – and its revenue and net income are still growing. In 3Q/2010, Gol reported increases of 88.8% in operating income and 41.2% in net income over 3Q/2009. Once again, the high load factor is key…As of 3Q/2010, the company boasted a 71.3% load factor, representing a 5.6% increase over 3Q/2009 and also topping Brazil’s 2010 overall airline industry load factor of 68.8%.
Brazil
Let's take a look at Gol's home: Brazil is a competitive and sophisticated country blessed with abundant natural resources, plus increasingly strong export ties to China and other South American economies. When the numbers are posted, Brazil’s economy will probably put in 7.5% for 2010. Despite signs of overheating, it is still expected to average 5.9% a year through 2014, according to the country’s finance ministry.
That makes it one of the fastest-growing economies on the globe and – with concentrations in agricultural, mining, and resources – puts it on track to be one of the single biggest concentrations of rising wages and purchasing power at the same time. Rising purchasing power means rising wages. And when you work back through the system, rising wages are driven by business expenditures – as is travel, which is itself a reflection of expanding purchasing power and business growth.Case in point: According to Ana (the country’s civil viation regulator), Brazil’s airline industry “load factor” jumped to 68.8% in 2010, up from 65.8% in 2009. (Load factor, by the way, is the average occupied percentage of available seats per flight.)
And it’s not just domestic flights that are boosting Brazilian air travel. Demand for international flights operated by Brazilian airlines climbed 20.4% in 2010, improving the load factor to 76.4%. Brazil is host to the FIFA World Cup in 2014 and the Olympics in 2016, and it’s no wonder President Dilma Rousseff’s administration has pledged massive investments to enlarge airport capacity.A lot has been said so far in 2011 about the U.S. pulling itself up off the mat after a financial smackdown of epic proportions. Private sector jobs are rising again, manufacturing is on the mend, and even consumer spending is coming back.But if you head to many of the so-called “developing” countries – China, India, Taiwan, South Korea, or Indonesia – well, it’s like the financial crisis never even happened. There, economic growth averages 8.11% a year. Compare that to the United States and the European Union, which are struggling to maintain growth rates of 2.9% and 1.7%, even after trillions in stimulus spending and unprecedented central bank meddling. We can see where growth is... In a world of growth hype the West itself can't escape its own metrics and growth logic for long without losing momentum.
Drone Arms Race Coming?
November 2011
New York Times national security correspondent Scott Shane has a recent opinion piece describing an “arms race” in military drones:
"The qualities that have made lethal drones so attractive to the Obama administration for counterterrorism appeal to many countries and, conceivably, to terrorist groups: a capacity for leisurely surveillance and precise strikes, modest cost, and most important, no danger to the operator, who may sit in safety thousands of miles from the target."
Shane recognizes the US as the leader, followed by Israel — countries that have built, deployed and used drones in both surveillance and as weapons platforms.
Then he looks at the list of other countries that are following fast in US footsteps to both build and deploy, as well as purchase or sell the technology — noting, correctly, that the list is a long one, starting with China...
At the Zhuhai air in China last November, Chinese companies startled some Americans by unveiling 25 different models of remotely controlled aircraft and showing video animation of a missile-armed drone taking out an armored vehicle.
However, worth noting, as well, something that is rarely noted: today’s sensor technologies work well over deserts and largely bare mountains. They have not been developed for seeing through forest or jungle cover. Moreover, it's important to see a central reason why the US is successful with drones in Pakistan — the investment over years in an on-the-ground intelligence network that permits targeting in the first place: focus on drones as technology does not always pay enough attention to this crucial, non-technological element.
Spring & transformation parallels in Eastern Europe
October 2011
It may actually be useful to see larger parallels to the transition processes in Eastern Europe earlier.
In all of those countries, political, economic and social reforms were difficult and confusing and were at times derailed.
In most cases, the opening of the political system brought about a wild pluralism of hastily created political parties, while the party structures of the old regime renamed and in some cases reformed themselves, retaining a substantial presence in the system.
In countries where democratic coalitions took power, the political and economic transition was quickly set in motion and in some cases a process of lustration essentially excluded political participation by those associated with abuses under the previous regime. In Bulgaria and Romania, where the old-regime forces actually won the first free elections, the transition and regime overhaul was initially subverted and delayed, and it took much longer to complete the process.
COMAC forecasts a demand of 4,700 new aircraft for China in next 20 yrs
22 Sept 2011
China’s state owned aircraft manufacturer, COMAC has forecast a demand of 4,700 new aircraft in China for the next 20 yrs. The company expects that it will be able to claim up to 30% of this market.
http://www.caacnews.com.cn/news2011/newsshow.aspx?idnews=176092 (in Chinese)
China’s state owned aircraft manufacturer, COMAC has forecast a demand of 4,700 new aircraft in China for the next 20 yrs. The company expects that it will be able to claim up to 30% of this market.
http://www.caacnews.com.cn/news2011/newsshow.aspx?idnews=176092 (in Chinese)
Arab Spring or Transition?
21 Sept 2011
The association between the term Arab Spring and a positive outcome is contradictional in Washington, where high-level analysts are reportedly saying that a more neutral wording should be used, such as "Arab transition," to underline the fact that we don't know where the uprisings will lead.
Not everyone finds positive connotations at all in the term Arab Spring. Lebanon's Rami Khouri sees it as another derogatory expression of Western Orientalism. Spring, he says, "is a passive term. It just happens to people -- helpless people who have no power and no say in the process." He also dislikes it because it evokes the temporary nature of the Prague Spring in 1968, when Czechs briefly rose up against the Soviets, only to see their dreams quickly dashed by Russian tanks in the streets, followed by a hardening of Communist rule.
George Friedman of Stratfor has been arguing for months that what happened in Egypt cannot be called a revolution because, in fact, there was no regime change. Mubarak, he says, headed the regime, but then the regime turned on him. Under Mubarak, a former general, Egypt was ruled by the military. Mubarak may be gone, he says, but the military regime has not relinquished power.
In Arabic, the most commonly used term to describe what is happening in the Arab Middle East is "thawra" (revolution). Khouri lists other terms, including "intifada" (uprising), "sahwa" (awakening) and "nahda" (renaissance.)
Because we are still in the early stages of what will undoubtedly be a lengthy process, it is impossible to know what these uprisings will accomplish. The debate over what to call them reflects the wishes, fears and ideologies of those arguing over the use of Arab Spring.
The association between the term Arab Spring and a positive outcome is contradictional in Washington, where high-level analysts are reportedly saying that a more neutral wording should be used, such as "Arab transition," to underline the fact that we don't know where the uprisings will lead.
Not everyone finds positive connotations at all in the term Arab Spring. Lebanon's Rami Khouri sees it as another derogatory expression of Western Orientalism. Spring, he says, "is a passive term. It just happens to people -- helpless people who have no power and no say in the process." He also dislikes it because it evokes the temporary nature of the Prague Spring in 1968, when Czechs briefly rose up against the Soviets, only to see their dreams quickly dashed by Russian tanks in the streets, followed by a hardening of Communist rule.
George Friedman of Stratfor has been arguing for months that what happened in Egypt cannot be called a revolution because, in fact, there was no regime change. Mubarak, he says, headed the regime, but then the regime turned on him. Under Mubarak, a former general, Egypt was ruled by the military. Mubarak may be gone, he says, but the military regime has not relinquished power.
In Arabic, the most commonly used term to describe what is happening in the Arab Middle East is "thawra" (revolution). Khouri lists other terms, including "intifada" (uprising), "sahwa" (awakening) and "nahda" (renaissance.)
Because we are still in the early stages of what will undoubtedly be a lengthy process, it is impossible to know what these uprisings will accomplish. The debate over what to call them reflects the wishes, fears and ideologies of those arguing over the use of Arab Spring.
Krugman calls for space aliens to fix US economy
28 August 2011
Paul Krugman: "If we discovered that space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months. And then if we discovered, oops, we made a mistake, there aren't any aliens, we'd be better..."
But by using GPP analysis, we can be smarter than that. We know a major anti-alien war effort would damage private output, and potentially push the U.S. Treasury into bankruptcy...
Paul Krugman: "If we discovered that space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months. And then if we discovered, oops, we made a mistake, there aren't any aliens, we'd be better..."
But by using GPP analysis, we can be smarter than that. We know a major anti-alien war effort would damage private output, and potentially push the U.S. Treasury into bankruptcy...
Apple, post-Jobs
26 August 2011
"The big thing about Steve Jobs is not his genius or his charisma but his extraordinary risk-taking," Alan Deutschman, who wrote a biography of Jobs, told The New York Times. "Apple has been so innovative because Jobs takes major risks, which is rare in corporate America. He doesn't market-test anything. It's all his own judgment and perfectionism and gut."
Apple's tech-world contributions with Jobs at the helm include the best of the best: Macintosh computer, iPod, iPhone and iPad. The company will likely release its fifth-generation iPhone in October.
Apple shares slipped 5.13% to $355.70 in after-hours trading following Jobs' announcement, erasing $17.7 billion from the stock's value. The stock rebounded somewhat yesterday during regular trading, closing down 0.65% at $373.72.
"The big thing about Steve Jobs is not his genius or his charisma but his extraordinary risk-taking," Alan Deutschman, who wrote a biography of Jobs, told The New York Times. "Apple has been so innovative because Jobs takes major risks, which is rare in corporate America. He doesn't market-test anything. It's all his own judgment and perfectionism and gut."
Apple's tech-world contributions with Jobs at the helm include the best of the best: Macintosh computer, iPod, iPhone and iPad. The company will likely release its fifth-generation iPhone in October.
Apple shares slipped 5.13% to $355.70 in after-hours trading following Jobs' announcement, erasing $17.7 billion from the stock's value. The stock rebounded somewhat yesterday during regular trading, closing down 0.65% at $373.72.
Worst. Congress. Ever.
7 August 2011
A new CBS News/New York Times poll last week revealed that 82% of Americans disapprove of the way Congress is doing its job - the highest disapproval rating since polling began in 1977. Just 14% approve of Congress' performance.
The CBS/NYT survey was taken on August 2nd and 3rd - immediately after the deal was brokered. It found that 68% of Americans disapprove of the way the Democrats handled the debt-ceiling debate, while just 28% approved.
Republicans fared even worse. Some 72% of Americans disapproved of their approach to the debt debate, while just 21% approved. Additionally, the majority of Americans (52%) say Republicans were too uncompromising. Comparatively, 34% say Democrats compromised too little.
NFL lockout seems to have ended
2 August 2011
Lockout seems to have ended: September 8th: The Green Bay Packers take on the New Orleans Saints at Lambeau Field on Thursday Night Football in the first regular season game.
Lockout seems to have ended: September 8th: The Green Bay Packers take on the New Orleans Saints at Lambeau Field on Thursday Night Football in the first regular season game.
S&P: US downgrade 50/50
1 Agust 2011
While sides seem to have agreed on a debt ceiling deal, it can still happen that the rating agencies will downgrade the United States for having too much debt, too-big deficits, and a generally inept government system.
An actual default of the U.S. government is very unlikely in the short term. (Though a default by about 2025 seems pretty well inevitable if the politicians don't straighten up and fly right!) The government can borrow from the Social Security trust fund (it's done that before), stop paying bureaucrats, or run an overdraft with the Fed.
Standard and Poor's has said that if the U.S. doesn't cut $4 trillion (over 10 years) out of the budget, a downgrade is more than 50/50. The politicians are pretty clearly not going to get near that number - except by outrageously dodgy accounting.
In reality, a AAA credit rating for a country that normally runs large budget deficits makes no sense. S&P could have downgraded the U.S. back in early 2009, when, having signed checks for $750 billion for the Troubled Asset Relief Program (TARP), the government then threw away another $800 billion on "stimulus."
Maybe it's not that plausible to describe a country that does that kind of stuff as "risk-free".
While sides seem to have agreed on a debt ceiling deal, it can still happen that the rating agencies will downgrade the United States for having too much debt, too-big deficits, and a generally inept government system.
An actual default of the U.S. government is very unlikely in the short term. (Though a default by about 2025 seems pretty well inevitable if the politicians don't straighten up and fly right!) The government can borrow from the Social Security trust fund (it's done that before), stop paying bureaucrats, or run an overdraft with the Fed.
Standard and Poor's has said that if the U.S. doesn't cut $4 trillion (over 10 years) out of the budget, a downgrade is more than 50/50. The politicians are pretty clearly not going to get near that number - except by outrageously dodgy accounting.
In reality, a AAA credit rating for a country that normally runs large budget deficits makes no sense. S&P could have downgraded the U.S. back in early 2009, when, having signed checks for $750 billion for the Troubled Asset Relief Program (TARP), the government then threw away another $800 billion on "stimulus."
Maybe it's not that plausible to describe a country that does that kind of stuff as "risk-free".
Syria - Uprisings, IAEA statement & international sanctions
June 2011
Last week was an eventful one for Syrian President Bashar al-Assad. With popular uprisings across Syria showing no sign of abating, international condemnation of the Syrian government's violent repression of the demonstrations intensified. On the eve of his highly anticipated speech on the Middle East, U.S. President Barack Obama announced sanctions against Damascus. And in an unprecedented move, the U.S. Treasury Department added Assad himself to its list of individuals under targeted financial sanctions. On Monday, the European Union, too, imposed its own set of sanctions.
Yet amid the domestic political earthquake that is shaking Assad's rule, another important development concerning Syria all but escaped the attention of the international press: International Atomic Energy Agency (IAEA) Director-General Yukiya Amano stated in an interview last Thursday that the Vienna-based nuclear watchdog has information indicating that Syria was most likely building a clandestine nuclear reactor in 2007.
The issue itself is not news: In September 2007, Israeli fighter jets bombed a site in the northern Syrian city of Dair al-Zour. In April 2008, the United States publicly released intelligence indicating the site housed a clandestine reactor and that Syria had acquired the technology from North Korea, in violation of U.N. sanctions against Pyongyang.
The IAEA, at the time led by Mohammed ElBaradei, initiated an inquiry to determine the nature of the Dair al-Zour site. After initially denying that any targets had even been attacked, Damascus has since maintained that the site was a missile factory -- that is, a military facility outside the scope of the IAEA. The investigation was further complicated by the fact that Damascus destroyed the remains of the site, covering them with earth from a nearby hill and erecting a new building in its place.
Last week was an eventful one for Syrian President Bashar al-Assad. With popular uprisings across Syria showing no sign of abating, international condemnation of the Syrian government's violent repression of the demonstrations intensified. On the eve of his highly anticipated speech on the Middle East, U.S. President Barack Obama announced sanctions against Damascus. And in an unprecedented move, the U.S. Treasury Department added Assad himself to its list of individuals under targeted financial sanctions. On Monday, the European Union, too, imposed its own set of sanctions.
Yet amid the domestic political earthquake that is shaking Assad's rule, another important development concerning Syria all but escaped the attention of the international press: International Atomic Energy Agency (IAEA) Director-General Yukiya Amano stated in an interview last Thursday that the Vienna-based nuclear watchdog has information indicating that Syria was most likely building a clandestine nuclear reactor in 2007.
The issue itself is not news: In September 2007, Israeli fighter jets bombed a site in the northern Syrian city of Dair al-Zour. In April 2008, the United States publicly released intelligence indicating the site housed a clandestine reactor and that Syria had acquired the technology from North Korea, in violation of U.N. sanctions against Pyongyang.
The IAEA, at the time led by Mohammed ElBaradei, initiated an inquiry to determine the nature of the Dair al-Zour site. After initially denying that any targets had even been attacked, Damascus has since maintained that the site was a missile factory -- that is, a military facility outside the scope of the IAEA. The investigation was further complicated by the fact that Damascus destroyed the remains of the site, covering them with earth from a nearby hill and erecting a new building in its place.
US debt rising
June 2011
According to the U.S. Congressional Budget Office (CBO) U.S. federal debt ballooned from 40% of gross domestic product (GDP) at the end of 2008 to more than 50% last year. And in a report issued last spring, the CBO warned that unless the US changes its course, the U.S. public debt could reach 90% of the nation's economic output by 2020.
America's debt-to-GDP ratio hasn't been near the 100% level since the end of World War II, when it peaked at 109%. When Greece touched off the worldwide sovereign-debt panic last year, its debt-to-GDP ratio was right around 120%.
Source: BEA, govtrack.us, Wikipedia
Even without such default fears, high debt loads stifle economic growth. In fact, one recent research study - conducted by economists Kenneth S. Rogoff of Harvard and Carmen M. Reinhart of the University of Maryland - concluded that when debt-to-GDP ratios exceed 90%, median growth rates fall by 1%, and average growth falls considerably more.
According to the U.S. Congressional Budget Office (CBO) U.S. federal debt ballooned from 40% of gross domestic product (GDP) at the end of 2008 to more than 50% last year. And in a report issued last spring, the CBO warned that unless the US changes its course, the U.S. public debt could reach 90% of the nation's economic output by 2020.
America's debt-to-GDP ratio hasn't been near the 100% level since the end of World War II, when it peaked at 109%. When Greece touched off the worldwide sovereign-debt panic last year, its debt-to-GDP ratio was right around 120%.
Source: BEA, govtrack.us, Wikipedia
Even without such default fears, high debt loads stifle economic growth. In fact, one recent research study - conducted by economists Kenneth S. Rogoff of Harvard and Carmen M. Reinhart of the University of Maryland - concluded that when debt-to-GDP ratios exceed 90%, median growth rates fall by 1%, and average growth falls considerably more.
Goldman on China, Goldman in China...
According to the Asian Venture Capital Journal, private equity investments in China increased to $19.7 billion last year - a 40% rise. Other big players are headed that way too, not the least of which are Morgan Stanley, The Carlyle Group, and, of course, Blackstone, the world's largest private equity shop.
January 18, 2011, Goldman Sachs issued a report that made international headlines telling investors to stay away from India and China because of the impact of rising inflation. At the time, the firm advocated that clients rotate into Wall Street and other markets as a means of achieving relative safety in the ensuing months.
The news panicked individual investors and contributed to a wholesale flight of capital from both markets that's continuing even now, while enriching some bigger players, who were undoubtedly already "short."
Meanwhile, Goldman CEO Lloyd Blankfein, according to Bloomberg (and almost entirely unreported in the U.S. press), Blankfein quietly attended a Beijing ceremony last week, while hatching plans to launch a yuan-denominated private equity fund worth $769 million USD in China.
The new fund, which is being set up in conjunction with Beijing's State Owned Capital Operation and Management Center, will be called the Broad Street (Beijing) RMB Fund.
Post-Osama prospects & context
Osama's place attacked by US SEALs was a compound in Abbottabad, a remote city 50 kilometers north of Islamabad, Pakistan. Not that very far... During the ensuing 40-minute firefight, Bin Laden and four others were killed - including, apparently, a woman who was used as a human shield.
For once - I am hearing through the back door - intelligence was not shared prior to the operation with Pakistan's ISI (intelligence service), which is being quietly spoken about as a key factor in the success of this raid. However, some reports place ISI members on site in Abbottabad during the raid. I think that's interesting, because it speaks to who may or may not have helped Bin Laden the last time efforts were made to go after him.
That part of the world is very complicated, to be sure, and context, as they say, really is everything when you are on the ground.
I'd expect to see a short-term "relief" pop in the markets, and already that appears to be underway. But I don't expect it to last long, and you shouldn't, either. Bin Laden was marginalized a long time ago. His death will not be a driver on anything other than the short term.
Speaking of which, if my hunch is correct, we're going to see the emergence of a "fear" trade prompted by everything from retribution to a renewed Taliban. So keep your trailing stops up nice and tight ;)
Winning the campaign after the battle
Bin Laden's death is also a victory for American intelligence and the military operation in Afghanistan. Bin Laden had apparently been hiding in plain sight, stowing in a mansion not far from Islamabad, Pakistan, rather than cave-hopping in the rural parts of the country, as had long been believed. Finally hitting a target that had been so elusive for so many years proves the effort, at least on one level, to be worthwhile.
But there are still much broader questions about the role the United States is playing in Afghanistan, Pakistan, Iraq and now Libya, where an effort that began with stopping Moammar Ghadafi from slaughtering his own people has now escalated into a third deep U.S. involvement in an Arab nation.
The money being spent, the lives being lost, and the ill will being fueled by the perception of American imperialism - none of it is made any easier by Bin Laden's death. The American nation still has a lot of serious doubts to erase about the goals and execution of the war on terror, and especially how it dovetails with or diverges from the revolts arising quite separately from the own efforts in the Mideast.
Bin Laden is dead. Ten years after 9/11, it's a profound relief to hear those words.
But the campaign against terrorism is just beginning to bear fruit -- and sustaining that campaign will require political and diplomatic persistence as well as tactical victories like the one that erased bin Laden.
Bin Laden was not an Islam leader - Obama
President Obama made an important point in Sunday night's stunning announcement that U.S. operatives have killed Osama Bin Laden.
Bin Laden, Obama emphasized, was not a Muslim leader, he was a terrorist who killed "scores of Muslims" as well as masterminding the 9/11 attack. Obama also stressed, as did President George W. Bush before him, that the USA "is not, and never will be, at war with Islam."
Osama dead - Update storyline
Update 1:
Family DNA used to identify...
Update 2:
Fox News, MSNBC, CNN...
NY Times, Washington Post, Wall Street Journal...
Update 3:
Not an air strike but gunfire?
Update 4:
Obama Confirms - United States operation killed Osama!
Update 5:
Obama ordered strike. Osama killed in fire fight.
Update 6:
Obama - "Justice has been done"
Update 7:
Osama killed in Pakistan, US in possession of his body.
Update 8:
Killed in Abbottabad (Pakistan).
Update 9:
As to the people asking why they waited a week; you need to act on the intelligence you gather from the raid before announcing or the info will be worthless, and you also want to 'extra' confirm because if you announce prematurely and you are wrong they will 'pound' you for it...
Bin Laden killed
Al Qaeda's elusive leader Osama bin Laden was killed in a mansion outside the Pakistani capital Islamabad, U.S. President Barack Obama said.
After searching in vain for the al Qaeda leader since he disappeared in Afghanistan in late 2001, Obama said the Saudi-born extremist is dead and his body recovered.
(picture from Getty images)
It is a major accomplishment for Obama and his national security team. Obama's predecessor, George W. Bush, had repeatedly vowed to bring to justice the mastermind of the Sept. 11, 2001, attacks on New York and Washington, but never did before leaving office in early 2009.
U.S. officials said that after searching in vain for the al Qaeda leader since he disappeared in Afghanistan in late 2001, the Saudi-born extremist is dead and his body recovered.
Having the body may help convince any doubters that bin Laden is really dead.
He had been the subject of a search since he eluded U.S. soldiers and Afghan militia forces in a large-scale assault on the Tora Bora mountains in 2001. The trail quickly went cold after he disappeared and many intelligence officials believed he had been hiding in Pakistan.
While in hiding, bin Laden had taunted the West and advocated his militant Islamist views in videotapes spirited from his hideaway.
Besides Sept. 11, Washington has also linked bin Laden to a string of attacks — including the 1998 bombings of American embassies in Kenya and Tanzania and the 2000 bombing of the warship USS Cole in Yemen.
Well-informed optimism leading to pessimism - on US monetary system
Despite widespread and growing optimism based on newfound consumer confidence, rising production, rising consumer data, and solid earnings, it is not certain that the worst is behind us.
Mind you - and this is very important - I am not suggesting the sky is falling, but, rather, that we keep our eyes open, even as exchanges ride to new highs.
Believe it or not, we may even be less concerned with Egypt than with the fact that US banking system remains almost completely out of control.
Neither the loose monetary policy nor the inherent conflicts of non-deliverable credit default swaps that caused this mess have been addressed.
Further, many of the risks accompanying them are actually more concentrated than they were when the credit crisis began. And the regulatory reforms that have been implemented to date are long on pretty language but short on specifics. That's why we may see them actually channeling risk-taking into new, unregulated funds that pose entirely new dangers to the world's financial systems.
Complicating matters is the fact that governments believe they have no choice but to come riding to the rescue when another big bank goes down... thereby removing the risks associated with a controlled failure and opening up the system to yet more unrestrained debt.
We had options three years ago... but not anymore. Central bankers the world over have just bet the ranch, and there is nothing left in reserve if another institution gets flushed.
Agency theory's perimeters - Corporate governance
31 January 2011 Kovacs Attila Mate
1. Definition of CG
Corporate Governance should cover the policies, procedures and rules governing the relationships between the shareholders, (stakeholders), directors and management of a company, as defined by the applicable laws, the corporate charter, the company's bylaws, and formal policies. Primarily it should deal with managing top management, building in checks and balances to ensure that the senior executives pursue strategies that are in accordance with the corporate mission.
It consists of a set of processes, customs, policies, laws and institutions affecting the way a corporation is directed, administered or controlled. Corporate governance governs the relationships among the many players involved (the stakeholders) and the goals for which the corporation is governed. The principal players are the shareholders, management and the board of directors. Other stakeholders include employees, suppliers, customers, banks and other lenders, regulators, the environment and the community at large.
2. Governments & CG
Despite the efforts of national governments and international organizations to improve corporate governance in emerging markets, the response of the companies themselves has been underwhelming.
Many companies ignore initiatives—which primarily involve reform of boards of directors—or just pay lip service to them. Little attention is paid to the directors' qualifications, even when reforms are mandated, as they are in South Korea, where 25 to 50 percent of a company's directors (depending on its size and sector) must now come from the outside. Could the problem be that the would-be reformers are focusing on the wrong reforms?
The corporate-governance model usually prescribed is the one that prevails in the United States and the United Kingdom. Its emphasis on shareholder value reflects the environment in those two countries, where a very large, dispersed class of investors, with no prior connection to the companies listed on the public exchanges, insists on boards that are similarly independent. These investors also demand a high level of financial and business disclosure.
3. Company & board reflexes, anchors & radical change
As companies have grappled with uncertainty of a magnitude that few have experienced before, boards and management have and should begin by questioning fundamental strategic assumptions:
Is our view of the market realistic? Does our financing strategy take into account the new conditions? Should we reset the incentive scheme or abandon any approach based on share prices? Can we exploit the current glut of talent? How can we take advantage of the pain our competitors are experiencing?
Unfortunately, most corporate directors are likely to assume that radical change is unnecessary and that “normal service” will soon resume. Their experiences during less severe crises—such as those in 1990, 1997, or 2001—will lull them into a false sense of complacency; few will adjust their strategies and policies sufficiently. This behavior is the result of a clinically observed human trait of being overly influenced by past experiences and judgments. Experts on decision-making call it anchoring. The problem is made worse by the natural rhythms that characterize how many boards are used to working—rhythms that tend to reinforce rather than challenge anchored thinking. Therefore board chairmen may need to play a special role in the coming months by challenging their boards to think things through afresh.
However, board procedures are anchored too. Meetings, agendas, and timetables typically follow a preset annual pattern. Advisers are scheduled to appear before audit and compensation committees. Attempts to make changes are often resisted—in part because of habit and in part because those involved have busy calendars. Even if there is energy for fresh, substantive work, the diary may defeat the best intentions. Granted, most boards have an annual offsite day when members talk strategy, but there is an understanding that major change is not expected. New ideas generated from the offsite are viewed as creative input rather than part of a fundamental review of strategy.
Mobilizing even a board to tackle a crisis requires a fundamental overhaul of how its members interact. The only solution is to force change. The gravity and urgency of the situation needs to be underlined by summoning boards to extraordinary meetings, “survival” meetings, “does our plan still make sense” meetings, and “how can we turn this pain into an opportunity” meetings. Without disrupting the rhythm, anchored thinking will continue to dominate.
The style of interaction can be another obstacle. Boards tend to establish patterns of behavior; for example, seating can become regularized, and some members may be expected to say little. Moreover, most boards have a default operating mode. Some place a premium on running smoothly—no disagreements, no late papers, no fluffed presentations, and no late finishes. Some are preoccupied with the formal aspects of governance: process dominates and content gets less attention. Some are financially oriented, with board members peering at their responsibilities through the numbers. But amidst all this heterogeneity lies, in our experience, one simple theme—there tends to be relatively little scope for genuine free thinking or for any fundamental reexamination of the premise of the company.
The solution is to explicitly change the way boards interact. The chairman should insist that members articulate what they have thought but have not had the confidence to express. These conversations will often be more conceptual, and participants will have to take the risk of “saying something stupid.” Chairmen will need to muster up the courage to drive relentlessly the discussions that will take most boards into deep and frightening waters. Long-cherished assumptions, existing plans, or defined ambitions may go down the drain.
1. Definition of CG
Corporate Governance should cover the policies, procedures and rules governing the relationships between the shareholders, (stakeholders), directors and management of a company, as defined by the applicable laws, the corporate charter, the company's bylaws, and formal policies. Primarily it should deal with managing top management, building in checks and balances to ensure that the senior executives pursue strategies that are in accordance with the corporate mission.
It consists of a set of processes, customs, policies, laws and institutions affecting the way a corporation is directed, administered or controlled. Corporate governance governs the relationships among the many players involved (the stakeholders) and the goals for which the corporation is governed. The principal players are the shareholders, management and the board of directors. Other stakeholders include employees, suppliers, customers, banks and other lenders, regulators, the environment and the community at large.
2. Governments & CG
Despite the efforts of national governments and international organizations to improve corporate governance in emerging markets, the response of the companies themselves has been underwhelming.
Many companies ignore initiatives—which primarily involve reform of boards of directors—or just pay lip service to them. Little attention is paid to the directors' qualifications, even when reforms are mandated, as they are in South Korea, where 25 to 50 percent of a company's directors (depending on its size and sector) must now come from the outside. Could the problem be that the would-be reformers are focusing on the wrong reforms?
The corporate-governance model usually prescribed is the one that prevails in the United States and the United Kingdom. Its emphasis on shareholder value reflects the environment in those two countries, where a very large, dispersed class of investors, with no prior connection to the companies listed on the public exchanges, insists on boards that are similarly independent. These investors also demand a high level of financial and business disclosure.
3. Company & board reflexes, anchors & radical change
As companies have grappled with uncertainty of a magnitude that few have experienced before, boards and management have and should begin by questioning fundamental strategic assumptions:
Is our view of the market realistic? Does our financing strategy take into account the new conditions? Should we reset the incentive scheme or abandon any approach based on share prices? Can we exploit the current glut of talent? How can we take advantage of the pain our competitors are experiencing?
Unfortunately, most corporate directors are likely to assume that radical change is unnecessary and that “normal service” will soon resume. Their experiences during less severe crises—such as those in 1990, 1997, or 2001—will lull them into a false sense of complacency; few will adjust their strategies and policies sufficiently. This behavior is the result of a clinically observed human trait of being overly influenced by past experiences and judgments. Experts on decision-making call it anchoring. The problem is made worse by the natural rhythms that characterize how many boards are used to working—rhythms that tend to reinforce rather than challenge anchored thinking. Therefore board chairmen may need to play a special role in the coming months by challenging their boards to think things through afresh.
However, board procedures are anchored too. Meetings, agendas, and timetables typically follow a preset annual pattern. Advisers are scheduled to appear before audit and compensation committees. Attempts to make changes are often resisted—in part because of habit and in part because those involved have busy calendars. Even if there is energy for fresh, substantive work, the diary may defeat the best intentions. Granted, most boards have an annual offsite day when members talk strategy, but there is an understanding that major change is not expected. New ideas generated from the offsite are viewed as creative input rather than part of a fundamental review of strategy.
Mobilizing even a board to tackle a crisis requires a fundamental overhaul of how its members interact. The only solution is to force change. The gravity and urgency of the situation needs to be underlined by summoning boards to extraordinary meetings, “survival” meetings, “does our plan still make sense” meetings, and “how can we turn this pain into an opportunity” meetings. Without disrupting the rhythm, anchored thinking will continue to dominate.
The style of interaction can be another obstacle. Boards tend to establish patterns of behavior; for example, seating can become regularized, and some members may be expected to say little. Moreover, most boards have a default operating mode. Some place a premium on running smoothly—no disagreements, no late papers, no fluffed presentations, and no late finishes. Some are preoccupied with the formal aspects of governance: process dominates and content gets less attention. Some are financially oriented, with board members peering at their responsibilities through the numbers. But amidst all this heterogeneity lies, in our experience, one simple theme—there tends to be relatively little scope for genuine free thinking or for any fundamental reexamination of the premise of the company.
The solution is to explicitly change the way boards interact. The chairman should insist that members articulate what they have thought but have not had the confidence to express. These conversations will often be more conceptual, and participants will have to take the risk of “saying something stupid.” Chairmen will need to muster up the courage to drive relentlessly the discussions that will take most boards into deep and frightening waters. Long-cherished assumptions, existing plans, or defined ambitions may go down the drain.
Mixed patterns of economic & financial recovery in the world
21 July 2010 Kovacs Attila Mate
The U.S. market was down slightly this week, as economic news during the week were generally negative, with the Michigan Index of Consumer Sentiment particularly so, down nine points between June and July. It is increasingly clear that the U.S. economic recovery is slowing markedly, with housing an especially weak spot following the end of the $8,000 first-time buyer subsidy.
However, the same is not true internationally.
Chinese growth slowed a little, but when "slowing growth" means a 10.3% rate of increase in the second quarter, we can hardly complain.
In Europe, Germany showed strong growth, and it became clear that the Spanish government at least was determined to get a grip on its budget problem. With Britain also recently having taken strong steps to put its fiscal house in order, the outlook for the E.U. is markedly stronger than it was a few months ago, and this has been reflected in a rebound in the euro, now trading at $1.29 against the U.S. dollar (compared with a recent bottom around $1.20).
Latin America, Colombia, Brazil, Chile, and Peru, all well-run, continued to show good growth, while Argentina, not so well-run, showed that commodities have become a sound basis for economic progress, even in poorly run economies.
The common thread in all this is fiscal and monetary policy.
The European Union has tightened its fiscal position sharply over the last few months, with even Greece showing signs of discipline, and China and most of Latin America never really had a fiscal problem.
On the monetary side, interest rates in Europe remain too low. But in emerging markets, there have been several recent interest rate rises. It is thus clear that, for countries pursuing fiscal and monetary policies with only moderate budget deficits and some monetary restraint, economic recovery is proceeding more or less on schedule.
Only the United States, where both fiscal and monetary policies remain hopelessly out of whack - with deficits much too big and interest rates much too low - is looking at the possibility of a "double dip" recession. Yet, there's nothing wrong with the U.S. economy that a little fiscal and monetary discipline couldn't cure...
Tags: sovereign debt crisis, Greece, banks, treasury auction, PIGS, Kovacs Attila Mate
The U.S. market was down slightly this week, as economic news during the week were generally negative, with the Michigan Index of Consumer Sentiment particularly so, down nine points between June and July. It is increasingly clear that the U.S. economic recovery is slowing markedly, with housing an especially weak spot following the end of the $8,000 first-time buyer subsidy.
However, the same is not true internationally.
Chinese growth slowed a little, but when "slowing growth" means a 10.3% rate of increase in the second quarter, we can hardly complain.
In Europe, Germany showed strong growth, and it became clear that the Spanish government at least was determined to get a grip on its budget problem. With Britain also recently having taken strong steps to put its fiscal house in order, the outlook for the E.U. is markedly stronger than it was a few months ago, and this has been reflected in a rebound in the euro, now trading at $1.29 against the U.S. dollar (compared with a recent bottom around $1.20).
Latin America, Colombia, Brazil, Chile, and Peru, all well-run, continued to show good growth, while Argentina, not so well-run, showed that commodities have become a sound basis for economic progress, even in poorly run economies.
The common thread in all this is fiscal and monetary policy.
The European Union has tightened its fiscal position sharply over the last few months, with even Greece showing signs of discipline, and China and most of Latin America never really had a fiscal problem.
On the monetary side, interest rates in Europe remain too low. But in emerging markets, there have been several recent interest rate rises. It is thus clear that, for countries pursuing fiscal and monetary policies with only moderate budget deficits and some monetary restraint, economic recovery is proceeding more or less on schedule.
Only the United States, where both fiscal and monetary policies remain hopelessly out of whack - with deficits much too big and interest rates much too low - is looking at the possibility of a "double dip" recession. Yet, there's nothing wrong with the U.S. economy that a little fiscal and monetary discipline couldn't cure...
Tags: sovereign debt crisis, Greece, banks, treasury auction, PIGS, Kovacs Attila Mate
German investor confidence plunged 40% in June
15 Jun 2010 Kovacs Attila Mate
There is a report from the Bank for International Settlements that showed the UK has major exposure to the Irish and Spanish banking systems, which many fear could be at risk in the next round of the financial crisis.
Moreover, German investor confidence dropped in June on concern that the sovereign debt crisis will undermine export prospects and crimp growth in Europe's largest economy. ZEW said its index of investor and analyst expectations, which aims to predict developments six months ahead, slumped to 28.7 from 45.8 in May.
This is a surprising development because the German economy is actually quite strong, with unemployment down to just 7.7% due to an increase in production to meet booming orders. Yet, the debt crisis seems to continue to spook investors because while the German economy is doing well at the moment, the austerity measures across Europe will hurt exports and growth later in the year.'
My view is that we're in an environment now in which there seems to be a real lack of understanding in the United States and Asia about how serious the European funding crisis could become. It reminds me of the way that subprime loan losses were dismissed in late 2007 as too small to worry about -- not just by investors and brokerage analyst, but by the Federal Reserve.
There is a report from the Bank for International Settlements that showed the UK has major exposure to the Irish and Spanish banking systems, which many fear could be at risk in the next round of the financial crisis.
Moreover, German investor confidence dropped in June on concern that the sovereign debt crisis will undermine export prospects and crimp growth in Europe's largest economy. ZEW said its index of investor and analyst expectations, which aims to predict developments six months ahead, slumped to 28.7 from 45.8 in May.
This is a surprising development because the German economy is actually quite strong, with unemployment down to just 7.7% due to an increase in production to meet booming orders. Yet, the debt crisis seems to continue to spook investors because while the German economy is doing well at the moment, the austerity measures across Europe will hurt exports and growth later in the year.'
My view is that we're in an environment now in which there seems to be a real lack of understanding in the United States and Asia about how serious the European funding crisis could become. It reminds me of the way that subprime loan losses were dismissed in late 2007 as too small to worry about -- not just by investors and brokerage analyst, but by the Federal Reserve.
Talk of Second Oil Spill in Gulf Grows Louder
8 Jun 2010 Kovacs Attila Mate
Talk of a second potential oil spill in the Gulf of Mexico grew louder Tuesday, fueled by several reports that the Ocean Saratoga rig, operated by Diamond Offshore, is leaking into the Gulf.
The Press Register, an Alabama newspaper, reported that a crew boat was seen spraying dispersant on a slick trailing from the drilling rig, which is located about 12 miles off the tip of Louisiana in about 500 feet of water.
The newspaper said it obtained a federal document showing that the leak has been ongoing since April 30.
Acting on a tip from satellite analytics group SkyTruth, Southwings pilot Tom Hutchings and photographer Henry Fair flew over the site and released a video that claims to show a plume of oil coming from the Ocean Saratoga rig. Skytruth is an environmental group that uses satellites to spot environmental problems.
Diamond Offshore CFO Gary Krenek said the oil-services company was hired by Taylor Energy, a privately held oil exploration company, based in New Orleans, that is the operator of the well. Krenek declined to comment on the reported leak, referring all calls to Taylor Energy.
Talk of a second potential oil spill in the Gulf of Mexico grew louder Tuesday, fueled by several reports that the Ocean Saratoga rig, operated by Diamond Offshore, is leaking into the Gulf.
The Press Register, an Alabama newspaper, reported that a crew boat was seen spraying dispersant on a slick trailing from the drilling rig, which is located about 12 miles off the tip of Louisiana in about 500 feet of water.
The newspaper said it obtained a federal document showing that the leak has been ongoing since April 30.
Acting on a tip from satellite analytics group SkyTruth, Southwings pilot Tom Hutchings and photographer Henry Fair flew over the site and released a video that claims to show a plume of oil coming from the Ocean Saratoga rig. Skytruth is an environmental group that uses satellites to spot environmental problems.
Diamond Offshore CFO Gary Krenek said the oil-services company was hired by Taylor Energy, a privately held oil exploration company, based in New Orleans, that is the operator of the well. Krenek declined to comment on the reported leak, referring all calls to Taylor Energy.
Hungary had its 15 minutes - shaking markets
7 June 2010 Kovacs Attila Mate
Big news out of Europe last week was new pressure on the Continent's financial system, resulting in -7% losses in major German and U.K. banks and a -12% loss for Spanish banks. A lot of these banks had recovered quite a bit out of the 2009 lows, and thus have a long way to fall if buyers fail to materialize soon.
As if Greece, Spain and Portugal were not enough of a concern, another villain emerged from behind the curtains this week: Hungary. A new government swept into office last week and the ruling party leader declared that the country had little chance of avoiding a Greek-style credit crisis because the former government had been cooking the books. Nice touch. A spokesman for Prime Minister Viktor Orban -- do we really have to learn new names below him as well? -- said it was not an exaggeration to talk about the potential for default.
Later, a new set of Hungarian officials said Orban's spokesman was misinterpreted, but the cat was out of the bag. Hungary is not in the euro zone, but its own currency -- the lovely forint, shown above -- was thrashed. It makes no difference whose story was right. The fact is that investors got a new country to worry about that wasn't even on the radar. Austrian banks fell heavily on the news because they are large investors in Hungary.
Surely you remember your history of the Austro-Hungarian Empire? It was ruled by Habsburgs and went by the awesome name Osterreichisch-Ungarische Monarchie. Its politics were dominated by disputes among its subject lands, including people who spoke Bosnian, Croatian, Czech, German, Hungarian, Italian, Polish, Romanian, Serbian, Slovenian and Ukranian. Let's not forget that World War 1 started as a dispute among these folks when Archduke Franz Ferdinand was assassinated on June 28, 1914. This is just not a great month for European news in world history.
Back then, a lot of alliances had developed over the years so an attack on Austria by a Slav led to an attack by the Austrians on the kingdom of Serbia. The Serbs in turn called in their chits and before long Germany invaded Belgium, Luxembourg and France, and Russia invaded Prussia. By the time it was all over, a lot of stupid trench warfare killed millions of kids and two empires turned to dust. Don't think that this can't happen again, updated with financial alliances.
On Sunday, Hungarians in the opposition party tried to quell the concern in Europe over the country's finances. "The government has created an artificial crisis,'' said veteran Parliament member Tibor Szanyi to the Wall Street Journal. ''They wanted to exaggerate the situation for political ends -- [but] it is really dangerous to do that in the heart of Europe."
In 2008, you may recall, Hungary, which was heavily indebted, was unable to borrow in capital markets amid the global credit crunch so it turned to the International Monetary Fund and the European Union for help. It got a bailout in exchange promises to place stringent limits on government spending such that the deficit was no more than 3.8% of gross domestic product. Now it seems that although the old government said they did comply, the new government says they didn't. Without knowing who is right, just observe that it's another matter that will undermine investors' trust. These things pile up.
Bottom line: Western Europe has swing into a period of pain that is no longer just about Greece and Spain and is much more about the companies that have lent to those countries. Write-downs among European banks will total as much as $239 billion, according to Bloomberg. More money will be required to fill up reserves, and where will it come from in a time of fiscal contraction?
Big news out of Europe last week was new pressure on the Continent's financial system, resulting in -7% losses in major German and U.K. banks and a -12% loss for Spanish banks. A lot of these banks had recovered quite a bit out of the 2009 lows, and thus have a long way to fall if buyers fail to materialize soon.
As if Greece, Spain and Portugal were not enough of a concern, another villain emerged from behind the curtains this week: Hungary. A new government swept into office last week and the ruling party leader declared that the country had little chance of avoiding a Greek-style credit crisis because the former government had been cooking the books. Nice touch. A spokesman for Prime Minister Viktor Orban -- do we really have to learn new names below him as well? -- said it was not an exaggeration to talk about the potential for default.
Later, a new set of Hungarian officials said Orban's spokesman was misinterpreted, but the cat was out of the bag. Hungary is not in the euro zone, but its own currency -- the lovely forint, shown above -- was thrashed. It makes no difference whose story was right. The fact is that investors got a new country to worry about that wasn't even on the radar. Austrian banks fell heavily on the news because they are large investors in Hungary.
Surely you remember your history of the Austro-Hungarian Empire? It was ruled by Habsburgs and went by the awesome name Osterreichisch-Ungarische Monarchie. Its politics were dominated by disputes among its subject lands, including people who spoke Bosnian, Croatian, Czech, German, Hungarian, Italian, Polish, Romanian, Serbian, Slovenian and Ukranian. Let's not forget that World War 1 started as a dispute among these folks when Archduke Franz Ferdinand was assassinated on June 28, 1914. This is just not a great month for European news in world history.
Back then, a lot of alliances had developed over the years so an attack on Austria by a Slav led to an attack by the Austrians on the kingdom of Serbia. The Serbs in turn called in their chits and before long Germany invaded Belgium, Luxembourg and France, and Russia invaded Prussia. By the time it was all over, a lot of stupid trench warfare killed millions of kids and two empires turned to dust. Don't think that this can't happen again, updated with financial alliances.
On Sunday, Hungarians in the opposition party tried to quell the concern in Europe over the country's finances. "The government has created an artificial crisis,'' said veteran Parliament member Tibor Szanyi to the Wall Street Journal. ''They wanted to exaggerate the situation for political ends -- [but] it is really dangerous to do that in the heart of Europe."
In 2008, you may recall, Hungary, which was heavily indebted, was unable to borrow in capital markets amid the global credit crunch so it turned to the International Monetary Fund and the European Union for help. It got a bailout in exchange promises to place stringent limits on government spending such that the deficit was no more than 3.8% of gross domestic product. Now it seems that although the old government said they did comply, the new government says they didn't. Without knowing who is right, just observe that it's another matter that will undermine investors' trust. These things pile up.
Bottom line: Western Europe has swing into a period of pain that is no longer just about Greece and Spain and is much more about the companies that have lent to those countries. Write-downs among European banks will total as much as $239 billion, according to Bloomberg. More money will be required to fill up reserves, and where will it come from in a time of fiscal contraction?
Hungary government commits to budget goal
6 June 2010 Kovacs Attila Mate
BUDAPEST (Reuters) - Hungary's government said on Saturday it aimed to meet this year's budget deficit target, seeking to draw a line under "exaggerated" talk of a possible Greek-style debt crisis that has unnerved global markets.
State secretary Mihaly Varga, leading a review of the country's public finances, said Hungary's previous socialist governments had hidden the true extent of the fiscal shortfall, and that additional measures would be needed to reach the 3.8 percent of GDP goal agreed with international lenders.
Analysts welcomed the government's intention to meet the target, which they said should calm markets somewhat on Monday, although details were needed and any tax cuts should be offset by spending cuts. The market consensus for this year's deficit is 5 percent.
They also said the government would need to work hard to restore credibility in its policies following a spate of contradictory comments on fiscal issues.
Fears of a Hungarian debt crisis pushed the euro to a four-year low on Friday after a ruling party official said the country had only a slim chance of avoiding Greece's fate, and the prime minister's spokesman said he supported this view.
"Those comments ... are exaggerated, and if a colleague makes them it is unfortunate," Varga told a news conference.
"The situation is consolidated, and the planned deficit (target) is attainable, but for it to be attainable the government must take measures."
He said some tax revenues were lower than planned in the current budget and several spending items higher or not included at all.
"We must state that the (recent) Bajnai government, similar to the Gyurcsany government in 2006, ... did not present a credible picture of the real state of the country," Varga said.
Asked repeatedly if it could be stated that Hungary was not close to default, Varga said: "Any comparison with countries with much higher CDSs (debt risk profiles) is unfortunate. These do not give a credible picture of the state of Hungary ..."
He said the government would come up with an action plan at a meeting ending on Monday.
Varga later told MTI news agency he trusted that decisions on the economy would be made on Monday and made public either on Monday, or by Tuesday morning the latest.
Varga declined to give an estimate for the 2010 deficit but said the government did aim to meet the 3.8 percent target agreed with the IMF and the European Union, which rescued Hungary from financial collapse in October 2008.
"Calmly, but firmly, we must prepare an action plan as soon as possible, a series of measures that can help us attain the deficit target," he said. "The Hungarian economy needs immediate, urgent measures."
EXPLANATIONS SOUGHT
Hungary's new center-right government, sworn in a week ago after winning elections in April, has so far not put forward a clear economic plan, saying only it wants to cut taxes and create jobs to boost growth.
Financial markets and investors had initially welcomed the new administration, saying its strong mandate -- a two-thirds parliamentary majority -- would encourage it to carry out much needed structural reforms in the inefficient state sector.
But damage done this week by comments that seemed to show up profound divisions within the government over how to tackle the fiscal conundrum will take time to repair, analysts said.
The European Commission warned Hungary on Thursday against losing the confidence of markets after talks with Prime Minister Viktor Orban, and urged it to accelerate fiscal consolidation.
The mixed messages from the government suggested it either wanted to backtrack on earlier promises of deep tax cuts, or set the domestic stage for potentially painful spending cuts or reforms, some analysts said.
Others said the government had failed to anticipate the market impact of chasing a domestic political agenda.
"We believe that yesterday's dramatic comments were intended for domestic consumption and were used to build a dramatic backdrop that would let Fidesz backtrack on a large share of its campaign promises and broadly continue with the fiscal policies of the previous government, as well as preparing the ground for another round of IMF talks," Goldman Sachs said.
Hungarian political scientist Richard Szentpeteri Nagy of think tank Meltanyossag told Reuters: "(Ruling party Fidesz) had to sketch out some economic nightmare scenarios.
"The motivation behind this was domestic, and not the careful, well thought-out public comments that would be correct in the international world."
CREDIBLE PROGRAMME NEEDED
The IMF's mission chief is expected in Hungary for informal talks next week. Varga said it would not be an official review. The last regular review was in February.
Local news website portfolio.hu said the IMF mission chief would arrive on Monday.
Hungary has not drawn on any IMF funds this year so far, but the new government has said it wanted to seek a new deal with lenders because the current financing deal expires by October.
Analysts said program details were needed and tax cuts may be delayed.
"The 3.8 percent target is achievable only if the government ... cuts spending or raises revenues. I don't think that tax cuts are possible in this situation," Zoltan Torok at Raiffeisen said.
Hungary had a deficit of 4 percent in 2009 at the price of deep spending cuts that exacerbated a recession but rebuilt market confidence.
The finance minister of the previous government said there were risks attached to the 2010 budget but the target could be met with tight fiscal policy.
BUDAPEST (Reuters) - Hungary's government said on Saturday it aimed to meet this year's budget deficit target, seeking to draw a line under "exaggerated" talk of a possible Greek-style debt crisis that has unnerved global markets.
State secretary Mihaly Varga, leading a review of the country's public finances, said Hungary's previous socialist governments had hidden the true extent of the fiscal shortfall, and that additional measures would be needed to reach the 3.8 percent of GDP goal agreed with international lenders.
Analysts welcomed the government's intention to meet the target, which they said should calm markets somewhat on Monday, although details were needed and any tax cuts should be offset by spending cuts. The market consensus for this year's deficit is 5 percent.
They also said the government would need to work hard to restore credibility in its policies following a spate of contradictory comments on fiscal issues.
Fears of a Hungarian debt crisis pushed the euro to a four-year low on Friday after a ruling party official said the country had only a slim chance of avoiding Greece's fate, and the prime minister's spokesman said he supported this view.
"Those comments ... are exaggerated, and if a colleague makes them it is unfortunate," Varga told a news conference.
"The situation is consolidated, and the planned deficit (target) is attainable, but for it to be attainable the government must take measures."
He said some tax revenues were lower than planned in the current budget and several spending items higher or not included at all.
"We must state that the (recent) Bajnai government, similar to the Gyurcsany government in 2006, ... did not present a credible picture of the real state of the country," Varga said.
Asked repeatedly if it could be stated that Hungary was not close to default, Varga said: "Any comparison with countries with much higher CDSs (debt risk profiles) is unfortunate. These do not give a credible picture of the state of Hungary ..."
He said the government would come up with an action plan at a meeting ending on Monday.
Varga later told MTI news agency he trusted that decisions on the economy would be made on Monday and made public either on Monday, or by Tuesday morning the latest.
Varga declined to give an estimate for the 2010 deficit but said the government did aim to meet the 3.8 percent target agreed with the IMF and the European Union, which rescued Hungary from financial collapse in October 2008.
"Calmly, but firmly, we must prepare an action plan as soon as possible, a series of measures that can help us attain the deficit target," he said. "The Hungarian economy needs immediate, urgent measures."
EXPLANATIONS SOUGHT
Hungary's new center-right government, sworn in a week ago after winning elections in April, has so far not put forward a clear economic plan, saying only it wants to cut taxes and create jobs to boost growth.
Financial markets and investors had initially welcomed the new administration, saying its strong mandate -- a two-thirds parliamentary majority -- would encourage it to carry out much needed structural reforms in the inefficient state sector.
But damage done this week by comments that seemed to show up profound divisions within the government over how to tackle the fiscal conundrum will take time to repair, analysts said.
The European Commission warned Hungary on Thursday against losing the confidence of markets after talks with Prime Minister Viktor Orban, and urged it to accelerate fiscal consolidation.
The mixed messages from the government suggested it either wanted to backtrack on earlier promises of deep tax cuts, or set the domestic stage for potentially painful spending cuts or reforms, some analysts said.
Others said the government had failed to anticipate the market impact of chasing a domestic political agenda.
"We believe that yesterday's dramatic comments were intended for domestic consumption and were used to build a dramatic backdrop that would let Fidesz backtrack on a large share of its campaign promises and broadly continue with the fiscal policies of the previous government, as well as preparing the ground for another round of IMF talks," Goldman Sachs said.
Hungarian political scientist Richard Szentpeteri Nagy of think tank Meltanyossag told Reuters: "(Ruling party Fidesz) had to sketch out some economic nightmare scenarios.
"The motivation behind this was domestic, and not the careful, well thought-out public comments that would be correct in the international world."
CREDIBLE PROGRAMME NEEDED
The IMF's mission chief is expected in Hungary for informal talks next week. Varga said it would not be an official review. The last regular review was in February.
Local news website portfolio.hu said the IMF mission chief would arrive on Monday.
Hungary has not drawn on any IMF funds this year so far, but the new government has said it wanted to seek a new deal with lenders because the current financing deal expires by October.
Analysts said program details were needed and tax cuts may be delayed.
"The 3.8 percent target is achievable only if the government ... cuts spending or raises revenues. I don't think that tax cuts are possible in this situation," Zoltan Torok at Raiffeisen said.
Hungary had a deficit of 4 percent in 2009 at the price of deep spending cuts that exacerbated a recession but rebuilt market confidence.
The finance minister of the previous government said there were risks attached to the 2010 budget but the target could be met with tight fiscal policy.
Financial crisis in Hungary - the days of politicians, bankers & skeletons
The Hungarian government has preemptively warned that it will soon outline massive economic restructuring... since it will soon, ominously, disclose the true state of its 2010 budget.
The Hungarian currency, the forint, fell and Hungarian bond yields rose on the news.
According to CNBC:
"After the figures reflecting the true state of the economy (become public), within 72 hours an economic action plan must be put on the table," Prime Minister Viktor Orban's spokesman Peter Szijjarto told TV2 television.
"It cannot be about...an adjustment, about patching up (the economy)...measures aimed at improving the financial situation must be linked with deep structural changes," Orban told the same television channel over the phone from Brussels.
...
He did not give details on the plans. His spokesman reiterated the budget was in a "much worse" state than what the previous government put down in the budget law and "skeletons were continuously falling out of the closet".
While the central bank has indicated a budget deficit of jus 4.5% of GDP, some government officials have suggested a figure north of 7%. The EU has pressed the government to disclose the extent of any problems as soon as possible so that they can be addressed, in order to avoid another situation like Greece where problems were hidden an unaddressed for too long.
The Hungarian currency, the forint, fell and Hungarian bond yields rose on the news.
According to CNBC:
"After the figures reflecting the true state of the economy (become public), within 72 hours an economic action plan must be put on the table," Prime Minister Viktor Orban's spokesman Peter Szijjarto told TV2 television.
"It cannot be about...an adjustment, about patching up (the economy)...measures aimed at improving the financial situation must be linked with deep structural changes," Orban told the same television channel over the phone from Brussels.
...
He did not give details on the plans. His spokesman reiterated the budget was in a "much worse" state than what the previous government put down in the budget law and "skeletons were continuously falling out of the closet".
While the central bank has indicated a budget deficit of jus 4.5% of GDP, some government officials have suggested a figure north of 7%. The EU has pressed the government to disclose the extent of any problems as soon as possible so that they can be addressed, in order to avoid another situation like Greece where problems were hidden an unaddressed for too long.
How much can we Bear?
Financial markets are driven by the sinking pace of reality into caraway seed-sized brains
24 May 2010 Kovacs Attila Mate
Financial markets are driven by the sinking pace of reality into caraway seed-sized brains.
Looking around, last Friday we could see technical picture mostly positive, sentiment bearish (which is market positive), earnings picture mostly positive.
Awesome, right? Not so fast. That makes this a good time to get a cold shower. 'cause it is worth asking: why then, did the sovereign debt crisis reared up to spook investors last week despite of the lack of any real news?
What matters is that Greece points to the fundamental problem that most government debt has been misused. When it's time to refinance, the debt has not created any productive assets that generate the cash flow necessary to pay it off. And every other country has the same problem.
Much of the borrowing in Spain, Italy and Ireland, not to mention the United States, was used to purchase unproductive assets like overpriced homes and consumer goods -- not factories or businesses that create cash flow. It's like all the money that was snapped out of thin air in borrowing and equity sales in the late '90s dot-com years that was used to buy advertising rather than to make things. When the security sales end, the boom ends.
All the past & present stresses are already showing up in currency markets, where volatility is now off the charts. Spain earlier this month suffered a failed auction of its 1-month and 18-month paper, which is very unusual for a major country. German banks are in grave danger, as they have never even written off their bad loans to Iceland, and now face big losses in Greece. And the riots in Athens are likely to become commonplace as governments in Lisbon, Dublin and Barcelona try to cut back on public employee wages and services, and raise retirement ages.
The last question still is: If conditions are really this bad, why did the market rally for the past year?
Maybe, people wanted to believe the fairy tale for a year - just wanted to believe things would get better. It's like T.S. Eliot said: 'Humankind cannot bear very much reality.'
Tags: sovereign debt crisis, Greece, banks, treasury auction, PIGS, Kovacs Attila Mate
Financial markets are driven by the sinking pace of reality into caraway seed-sized brains.
Looking around, last Friday we could see technical picture mostly positive, sentiment bearish (which is market positive), earnings picture mostly positive.
Awesome, right? Not so fast. That makes this a good time to get a cold shower. 'cause it is worth asking: why then, did the sovereign debt crisis reared up to spook investors last week despite of the lack of any real news?
What matters is that Greece points to the fundamental problem that most government debt has been misused. When it's time to refinance, the debt has not created any productive assets that generate the cash flow necessary to pay it off. And every other country has the same problem.
Much of the borrowing in Spain, Italy and Ireland, not to mention the United States, was used to purchase unproductive assets like overpriced homes and consumer goods -- not factories or businesses that create cash flow. It's like all the money that was snapped out of thin air in borrowing and equity sales in the late '90s dot-com years that was used to buy advertising rather than to make things. When the security sales end, the boom ends.
All the past & present stresses are already showing up in currency markets, where volatility is now off the charts. Spain earlier this month suffered a failed auction of its 1-month and 18-month paper, which is very unusual for a major country. German banks are in grave danger, as they have never even written off their bad loans to Iceland, and now face big losses in Greece. And the riots in Athens are likely to become commonplace as governments in Lisbon, Dublin and Barcelona try to cut back on public employee wages and services, and raise retirement ages.
The last question still is: If conditions are really this bad, why did the market rally for the past year?
Maybe, people wanted to believe the fairy tale for a year - just wanted to believe things would get better. It's like T.S. Eliot said: 'Humankind cannot bear very much reality.'
Tags: sovereign debt crisis, Greece, banks, treasury auction, PIGS, Kovacs Attila Mate
With or without Favre? - Vikings' 64k$ question
30 Apr 2010 Kovacs Attila Mate
Brett Favre is still stinging from that painful loss to the New Orleans Saints in the NFC title game three months ago—so much so that it’s a factor in his decision to come back to the Vikings next season.
Favre issued a statement on his website Friday saying that his left ankle is still hurting and will require surgery if he wants to return for Minnesota. But he said the injury “is not debilitating” and he’s come through far worse in a 19-year career built on playing through pain.
“I don’t believe major surgery on the ankle would be required for me to return in 2010,” Favre wrote. “I’ve consulted with Dr. (James) Andrews on the phone, and a relatively minor procedure could be done to improve the dexterity of the ankle, and to relieve the pain. I’ve put up with pain worse than this in my career, and I didn’t want anyone to assume that the possibility of surgery was the sole factor that would determine whether I return or not.”
Currently holding all the NFL’s major career passing records, Favre will turn 41 in October. He has turned the waiting game into an art form late in his career, and it appears this summer will be no different.
The Vikings have made it clear they won’t pressure Favre into a decision on whether he will return for a 20th NFL season.
“The ankle pain is a factor, but one of many factors that I’ll need to consider in making my decision,” said Favre, who is believed to be at his home in Mississippi. “Other factors include the input of my family, and the wonderful experience that I had last year with the Vikings.”
Vikings coach Brad Childress said he was neither surprised nor concerned by the revelation that Favre needs another surgery. He reiterated that he would be fine with Favre missing the first two weeks of training camp like he did last year.
“We were aware of it and in fact spoke about it at the end of the season and it’s just a matter of whether he was going to or not going to address,” Childress said. “We all are familiar with his aversion to surgery. That’s no surprise. So it’s just something if you want to live with it and whether you want to live with it the whole lifetime or want to fix it now, fix it again later.”
Earlier in the day, Favre told ESPN in an e-mail that the ankle is still swollen and painful and that surgery was unavoidable if he wanted to keep playing.
“This decision would be easy if not for my teammates and the fans and the entire Vikings staff,” Favre said in the e-mail posted on ESPN.com. “One year truly felt like 10—much like Green Bay for many years. That’s what I was missing in my heart I suppose, a sense of belonging.”
Favre then issued his statement, seeming to downplay the severity of his injury by saying he feels good enough to work on his property in Mississippi.
“Sure—certain exercises cause some ankle pain, but it’s nothing that I haven’t experienced (or played with) before,” he wrote. “In fact, many people don’t realize that I injured my ankle before the NFC Championship game. I’ve had surgery on this ankle twice before, and I’ve played with the pain before. The hits I took throughout the 2009 season, including the Saints game, just added to the ankle pain and likely caused some bone spurs.”
If this all sounds a little familiar, that’s because it’s the fourth installment of a drama miniseries that has run every summer since 2006.
His waffling ultimately led to an ugly parting with the Packers that got him traded from Green Bay to the New York Jets in 2008. After a so-so season in New York, he announced his retirement in early 2009 for the second time, then reconsidered and signed with the Vikings.
He enjoyed one of the best seasons of his storied career, throwing for 33 touchdowns and only seven interceptions and guiding the Vikings to a 12-4 record. Favre twice beat the Packers, who should give two-time division champion Minnesota stiff competition for the title next season whether he returns or not.
“Somebody tell Brett to have that surgery so I can make up for last year!!!” Packers linebacker Nick Barnett posted on Twitter.
Now Favre and the Vikings are back in the same place as last year.
The quandary then was whether he wanted to have surgery to repair a partially torn biceps tendon in his right shoulder. Andrews performed that surgery and Favre made it through the entire 2009 season without any problems with his arm or shoulder.
Favre is under contract for $13 million this season, but that’s only if he plays. Several signs point to the Vikings believing he will return, including not pursuing a trade for Donovan McNabb(notes) and declining to select a quarterback of the future in the draft.
“I still don’t know (what he’s going to do),” Childress insisted on Friday. “That’s my story and I’m sticking to it from way back when.”
Tags: Brett Favre, NFL, Minnesota Vikings, Zigi Wilf, Kovacs Attila Mate, strategy, crisis, management, investment
Brett Favre is still stinging from that painful loss to the New Orleans Saints in the NFC title game three months ago—so much so that it’s a factor in his decision to come back to the Vikings next season.
Favre issued a statement on his website Friday saying that his left ankle is still hurting and will require surgery if he wants to return for Minnesota. But he said the injury “is not debilitating” and he’s come through far worse in a 19-year career built on playing through pain.
“I don’t believe major surgery on the ankle would be required for me to return in 2010,” Favre wrote. “I’ve consulted with Dr. (James) Andrews on the phone, and a relatively minor procedure could be done to improve the dexterity of the ankle, and to relieve the pain. I’ve put up with pain worse than this in my career, and I didn’t want anyone to assume that the possibility of surgery was the sole factor that would determine whether I return or not.”
Currently holding all the NFL’s major career passing records, Favre will turn 41 in October. He has turned the waiting game into an art form late in his career, and it appears this summer will be no different.
The Vikings have made it clear they won’t pressure Favre into a decision on whether he will return for a 20th NFL season.
“The ankle pain is a factor, but one of many factors that I’ll need to consider in making my decision,” said Favre, who is believed to be at his home in Mississippi. “Other factors include the input of my family, and the wonderful experience that I had last year with the Vikings.”
Vikings coach Brad Childress said he was neither surprised nor concerned by the revelation that Favre needs another surgery. He reiterated that he would be fine with Favre missing the first two weeks of training camp like he did last year.
“We were aware of it and in fact spoke about it at the end of the season and it’s just a matter of whether he was going to or not going to address,” Childress said. “We all are familiar with his aversion to surgery. That’s no surprise. So it’s just something if you want to live with it and whether you want to live with it the whole lifetime or want to fix it now, fix it again later.”
Earlier in the day, Favre told ESPN in an e-mail that the ankle is still swollen and painful and that surgery was unavoidable if he wanted to keep playing.
“This decision would be easy if not for my teammates and the fans and the entire Vikings staff,” Favre said in the e-mail posted on ESPN.com. “One year truly felt like 10—much like Green Bay for many years. That’s what I was missing in my heart I suppose, a sense of belonging.”
Favre then issued his statement, seeming to downplay the severity of his injury by saying he feels good enough to work on his property in Mississippi.
“Sure—certain exercises cause some ankle pain, but it’s nothing that I haven’t experienced (or played with) before,” he wrote. “In fact, many people don’t realize that I injured my ankle before the NFC Championship game. I’ve had surgery on this ankle twice before, and I’ve played with the pain before. The hits I took throughout the 2009 season, including the Saints game, just added to the ankle pain and likely caused some bone spurs.”
If this all sounds a little familiar, that’s because it’s the fourth installment of a drama miniseries that has run every summer since 2006.
His waffling ultimately led to an ugly parting with the Packers that got him traded from Green Bay to the New York Jets in 2008. After a so-so season in New York, he announced his retirement in early 2009 for the second time, then reconsidered and signed with the Vikings.
He enjoyed one of the best seasons of his storied career, throwing for 33 touchdowns and only seven interceptions and guiding the Vikings to a 12-4 record. Favre twice beat the Packers, who should give two-time division champion Minnesota stiff competition for the title next season whether he returns or not.
“Somebody tell Brett to have that surgery so I can make up for last year!!!” Packers linebacker Nick Barnett posted on Twitter.
Now Favre and the Vikings are back in the same place as last year.
The quandary then was whether he wanted to have surgery to repair a partially torn biceps tendon in his right shoulder. Andrews performed that surgery and Favre made it through the entire 2009 season without any problems with his arm or shoulder.
Favre is under contract for $13 million this season, but that’s only if he plays. Several signs point to the Vikings believing he will return, including not pursuing a trade for Donovan McNabb(notes) and declining to select a quarterback of the future in the draft.
“I still don’t know (what he’s going to do),” Childress insisted on Friday. “That’s my story and I’m sticking to it from way back when.”
Tags: Brett Favre, NFL, Minnesota Vikings, Zigi Wilf, Kovacs Attila Mate, strategy, crisis, management, investment
Vikings owner wants Favre back in 2010
Brett Favre may be 40 and have a certain way of really irradiating his head coaches, but Minnesota Vikings owner Zygi Wilf doesn't care. His team is winning and has won its division for two straight years. Why mess with that?
So Wilf tells the Minneapolis Star-Tribune that he'll "do everything he can to bring back" Favre. So prepare yourselves, football fans, for another fun off-season that is all-Favre, all the time.
Wilf thinks the whole Brad Childress/Favre brouhaha is overblown but that's the company line right now. That's what both Favre and Childress said at the team's press conference yesterday.
But there's no reason to think that Childress and Favre will continue to be frustrated with each other, especially since, as the Star-Tribune points out, every Vikings quarterback has had a few bones to pick with Childress since he came aboard.
Brad Johnson, Kelly Holcomb, and Gus Frerotte all had a few things to say either publicly or privately about the fact that Childress didn't allow them more input into the offense.
Tags: Brett Favre, NFL, Minnesota Vikings, Zigi Wilf, Kovacs Attila Mate, strategy, crisis, management, investment
So Wilf tells the Minneapolis Star-Tribune that he'll "do everything he can to bring back" Favre. So prepare yourselves, football fans, for another fun off-season that is all-Favre, all the time.
Wilf thinks the whole Brad Childress/Favre brouhaha is overblown but that's the company line right now. That's what both Favre and Childress said at the team's press conference yesterday.
But there's no reason to think that Childress and Favre will continue to be frustrated with each other, especially since, as the Star-Tribune points out, every Vikings quarterback has had a few bones to pick with Childress since he came aboard.
Brad Johnson, Kelly Holcomb, and Gus Frerotte all had a few things to say either publicly or privately about the fact that Childress didn't allow them more input into the offense.
Tags: Brett Favre, NFL, Minnesota Vikings, Zigi Wilf, Kovacs Attila Mate, strategy, crisis, management, investment
Apple's price to freefall -50%?
9 May 2010
The few lucky investors that purchased Apple at $199 following the mysterious electronic plunge in the markets Thursday made a quick 20 percent return as the stock closed above $240. One of those buyers was definitely not Edward Zabitsky. He believes the stock is going to $126 and recommends selling it short.
Zabitsky, who founded his research firm Active Communications Integration in 1997 to consult the telecom industry and institutional investors, believes one of the most-favored stocks on Wall Street will decline nearly 50 percent because of competition from phones using Google’s Android software and because of a double dip in the American economy that will hit luxury brands as a consumer and government debt bubble bursts.
“Apple is a luxury brand and in the past has correlated very well with LVMH Moet Hennessy and Christian Dior,” said Zabitsky, who is based in Toronto, in an interview today. “America didn’t get rid of the bad debt, the government just took it over and consumer credit is trending down.”
To be sure, Zabitsky will be the first to tell you that he has been dead wrong on Apple this year and did not expect that this economic and consumer recovery to be so strong. But this analyst, whose macro perspective is rare for someone covering individual companies, is not letting this past mistake influence this call. To put his $126 target in perspective, the average forecast from Wall Street analysts is $300.
Apple led the market lower Friday as risk-averse investors took profits in past winners to raise some cash. Investors remain on edge following one of the most volatile days in the history of markets.
For what it’s worth, Zabitsky declines to reveal his models that get him to the $126 figure, but said it was based on much lower iPhone prices hitting margins. The increasing capabilities of phones made by HTC and the end of the AT&T exclusivity contract will be the catalyst for that plummeting profitability.
“When the iPhone came out it was grossly different,” added the analyst. “Apple has raised the bar on what’s normal, but other phones are easily narrowing the difference because web technology is easier to program.”
Investors are suspicious of this call, especially considering Apple has $25 a share in cash alone, they said.
“Going back to 2006, Apple hasn’t been subject to the economy,” said Pete Najarian, co-founder of OptionsMonster.com and TradeMonster.com. “It shows people will hold onto their gadgets even if the economy gets tough.”
Added Najarian, “If he is right and economic circumstances cause Apple to drop to $126, we’ve got much bigger problems to worry about than that.”
Tags: Apple, DJIA, Nasdaq, Stock Exchange, Steve Jobs
The few lucky investors that purchased Apple at $199 following the mysterious electronic plunge in the markets Thursday made a quick 20 percent return as the stock closed above $240. One of those buyers was definitely not Edward Zabitsky. He believes the stock is going to $126 and recommends selling it short.
Zabitsky, who founded his research firm Active Communications Integration in 1997 to consult the telecom industry and institutional investors, believes one of the most-favored stocks on Wall Street will decline nearly 50 percent because of competition from phones using Google’s Android software and because of a double dip in the American economy that will hit luxury brands as a consumer and government debt bubble bursts.
“Apple is a luxury brand and in the past has correlated very well with LVMH Moet Hennessy and Christian Dior,” said Zabitsky, who is based in Toronto, in an interview today. “America didn’t get rid of the bad debt, the government just took it over and consumer credit is trending down.”
To be sure, Zabitsky will be the first to tell you that he has been dead wrong on Apple this year and did not expect that this economic and consumer recovery to be so strong. But this analyst, whose macro perspective is rare for someone covering individual companies, is not letting this past mistake influence this call. To put his $126 target in perspective, the average forecast from Wall Street analysts is $300.
Apple led the market lower Friday as risk-averse investors took profits in past winners to raise some cash. Investors remain on edge following one of the most volatile days in the history of markets.
For what it’s worth, Zabitsky declines to reveal his models that get him to the $126 figure, but said it was based on much lower iPhone prices hitting margins. The increasing capabilities of phones made by HTC and the end of the AT&T exclusivity contract will be the catalyst for that plummeting profitability.
“When the iPhone came out it was grossly different,” added the analyst. “Apple has raised the bar on what’s normal, but other phones are easily narrowing the difference because web technology is easier to program.”
Investors are suspicious of this call, especially considering Apple has $25 a share in cash alone, they said.
“Going back to 2006, Apple hasn’t been subject to the economy,” said Pete Najarian, co-founder of OptionsMonster.com and TradeMonster.com. “It shows people will hold onto their gadgets even if the economy gets tough.”
Added Najarian, “If he is right and economic circumstances cause Apple to drop to $126, we’ve got much bigger problems to worry about than that.”
Tags: Apple, DJIA, Nasdaq, Stock Exchange, Steve Jobs
You can only compare Apple with Apple, and it can easily shine on
20 April Attila Mate Kovacs
It's easily one of the most anticipated earnings reports of the season, and Apple is primed to shine.
True enough that the first calendar quarter sees a marked drop-off in business for Apple , since the holiday shopping season is so critical to this company. But that doesn't mean there's any less excitement ahead.
The Street is looking for $2.43 a share on $12 billion in revenue.
Other key numbers to watch: 2.9 million Macs sold, though after the NPD market research report, there's some concern that Apple might disappoint here. I'm not buying it. If Mac sales slowed in March, as the report suggests, it was likely because of all the attention lavished on iPad. And with new portables unveiled last week, I'd be surprised if Apple doesn't easily reclaim its Mac mojo, and quickly.
iPhone should have sold about 7.5 million units during the quarter. iPod should hit about 10 million units. We'll likely get an update on iPad's sales progress, but because of its April release, it won't have any direct affect on earnings tonight. And news just this morning that the 3G version will be released on April 30, and not May 7 as feared lately, bodes well for Apple's current quarter.
Looking out to the current quarter, the Street's at $2.65 and $12.9 billion. Apple always does a guidance dance, so the real question is how down the company downplays expectations. Most on the Street are wise to Apple's game, and the company almost always disappoints.
But with iPad selling so well, and new iPhones on the way in June, it's getting harder and harder for Apple to dampen expectations. I think the company's guidance tonight will still be tepid, but far less so than in quarters past, and that bodes well for investors.
Today we'll get a snapshot of Apple once again, and we'll examine the numbers inside and out. What we'll find should come as no surprise to anyone following this company and the trends upon which it is seizing.
The fundamentals at Apple are the envy of just about every company in business today: it can't build its products fast enough. It sells what it ships. Its margins should reach 40 percent and its cash position could swell to $40 billion. Tens of millions of shoppers visit its retail stores, many of whom actually buy something before they leave. Even at $248 a share, on a relative basis and against the growth Apple manages to post, the company's stock isn't expensive.
Even at these levels, Apple seems to be such a better value proposition than anyone else with whom it competes. Research in Motion does well with the Blackberry, but that's all there is. Google does well with Search but for now that's all there is. Microsoft does exceptionally well with software but that's all there is. All of Apple's competitors are huge, and successful, and innovative, and offer great stories.
But none offers the diversified product portfolio of Apple's hardware, software, and retail, and the payroll talent to take advantage of it all. And that's why Apple commands the premium it does, and why that premium still has a ways to go based on the multiples at which Apple's competitors trade.
Say what you will about Apple's maniacal focus on secrecy, the weird, intimidating management style of Steve Jobs, the unfamiliar and insular corporate culture on campus in Cupertino. This company continues to innovate, drives competition, creates, pushes forward, prints money like no one else, and in this ends-justifies-the-means world of ours, sits all alone on a perch of success just about everyone else is trying to achieve.
Apple doesn't get a free pass. It has to perform. It has to meet or beat expectations. When it slips it will feel the pain. It can't break the law. Like a shark, it can't just stop moving or it will die, even though living off the interest of its cash position alone would make it one of the most profitable companies around. But that's just it, Apple isn't at risk of stopping, or slowing down. In fact, it's accelerating.
Those who sing Apple's praises get shuffled aside as "fanboys," swooned by the so-called reality distortion field. Forget all that: Focus on the fundamentals, financially and otherwise and there's nothing distorted about Apple's success. It's very real, very profitable, and because of the markets and trends Apple serves—and owns, and has only just begun.
It's easily one of the most anticipated earnings reports of the season, and Apple is primed to shine.
True enough that the first calendar quarter sees a marked drop-off in business for Apple , since the holiday shopping season is so critical to this company. But that doesn't mean there's any less excitement ahead.
The Street is looking for $2.43 a share on $12 billion in revenue.
Other key numbers to watch: 2.9 million Macs sold, though after the NPD market research report, there's some concern that Apple might disappoint here. I'm not buying it. If Mac sales slowed in March, as the report suggests, it was likely because of all the attention lavished on iPad. And with new portables unveiled last week, I'd be surprised if Apple doesn't easily reclaim its Mac mojo, and quickly.
iPhone should have sold about 7.5 million units during the quarter. iPod should hit about 10 million units. We'll likely get an update on iPad's sales progress, but because of its April release, it won't have any direct affect on earnings tonight. And news just this morning that the 3G version will be released on April 30, and not May 7 as feared lately, bodes well for Apple's current quarter.
Looking out to the current quarter, the Street's at $2.65 and $12.9 billion. Apple always does a guidance dance, so the real question is how down the company downplays expectations. Most on the Street are wise to Apple's game, and the company almost always disappoints.
But with iPad selling so well, and new iPhones on the way in June, it's getting harder and harder for Apple to dampen expectations. I think the company's guidance tonight will still be tepid, but far less so than in quarters past, and that bodes well for investors.
Today we'll get a snapshot of Apple once again, and we'll examine the numbers inside and out. What we'll find should come as no surprise to anyone following this company and the trends upon which it is seizing.
The fundamentals at Apple are the envy of just about every company in business today: it can't build its products fast enough. It sells what it ships. Its margins should reach 40 percent and its cash position could swell to $40 billion. Tens of millions of shoppers visit its retail stores, many of whom actually buy something before they leave. Even at $248 a share, on a relative basis and against the growth Apple manages to post, the company's stock isn't expensive.
Even at these levels, Apple seems to be such a better value proposition than anyone else with whom it competes. Research in Motion does well with the Blackberry, but that's all there is. Google does well with Search but for now that's all there is. Microsoft does exceptionally well with software but that's all there is. All of Apple's competitors are huge, and successful, and innovative, and offer great stories.
But none offers the diversified product portfolio of Apple's hardware, software, and retail, and the payroll talent to take advantage of it all. And that's why Apple commands the premium it does, and why that premium still has a ways to go based on the multiples at which Apple's competitors trade.
Say what you will about Apple's maniacal focus on secrecy, the weird, intimidating management style of Steve Jobs, the unfamiliar and insular corporate culture on campus in Cupertino. This company continues to innovate, drives competition, creates, pushes forward, prints money like no one else, and in this ends-justifies-the-means world of ours, sits all alone on a perch of success just about everyone else is trying to achieve.
Apple doesn't get a free pass. It has to perform. It has to meet or beat expectations. When it slips it will feel the pain. It can't break the law. Like a shark, it can't just stop moving or it will die, even though living off the interest of its cash position alone would make it one of the most profitable companies around. But that's just it, Apple isn't at risk of stopping, or slowing down. In fact, it's accelerating.
Those who sing Apple's praises get shuffled aside as "fanboys," swooned by the so-called reality distortion field. Forget all that: Focus on the fundamentals, financially and otherwise and there's nothing distorted about Apple's success. It's very real, very profitable, and because of the markets and trends Apple serves—and owns, and has only just begun.
IPad - hands on
April 13
Kickoff
First off, this is not a netbook killer. It’s really a new category of device, focused more on entertainment than productivity (although iWork brings some of that to the table). The iPad does a really nice job of surfing the Web, displaying photos, and playing videos, and it taps into Apple’s ever-growing library of apps. After fiddling with Need for Speed on the iPad, I can say this is a killer gaming device, making the iPad the ultimate gadget for couch potatoes. And because of its extreme mobility and up to 10 hours of battery life, you can take this tablet anywhere. But is this really a substitute for a cheap mini laptop? Nope.
Dimensions, Ports, and the iCase
Because the iPad is like a supersized iPod touch, it shares many of the same strengths and weaknesses. But lets start with with the positives. Measuring 0.5 inches and weighing 1.5 pounds, the iPad is a gorgeous piece of hardware. The 9.7-inch display (1024 x 768 pixels) picks up a fair number of fingerprints but it is bright and crisp, a perfect canvas for photos, Web pages, and full-screen videos. The top side has the 3.5mm jack, and the bottom houses the dock connector, which fits into such accessories as the keyboard dock and carrying case. The right side of the iPad has the volume controls, and up front is single home button (just like the iPod touch and iPhone). The back of this tablet is decked out in aluminum, lending the iPad a high-end feel for just $499.
What the iPad Needs
It’s what’s missing from the iPad that lessens its appeal. For example, you can’t multitask on this device, which we think is a big deal. A 1-GHz processor should be able to handle this capability. You also don’t get a camera, either for shooting or for video calls–another bummer. I imagine a lot of people want to make Skype calls on a device like this. In addition, the iPad doesn’t have GPS, so you can’t use it as a navigator (although I’m hoping the 3G version adds better triangulation than the stock Wi-Fi connectivity). And for a device that’s designed to bring you the full Web, the lack of Flash support is disappointing. The iPhone 3.2 OS that the iPad runs doesn’t offer this functionality.
Conclusion
Overall, the iPad is easily one of the best tablet computers yet, with a great multitouch interface, speedy performance, long endurance, and a fun gaming experience. We also think it’s a strong Kindle alternative for those who want an eReader with more versatility. However, a low-cost netbook can do a lot more than the iPad, including multitasking and video calls, and they offer a better text input experience. Do I want one? Yes. Would I be willing to shell out $499 or more? I’ll wait to make that call until I get one in for a full review (á propos, thx to MetzMate until then, for his experiences from the States). And 'till it gets through the ocean ;)
Kickoff
First off, this is not a netbook killer. It’s really a new category of device, focused more on entertainment than productivity (although iWork brings some of that to the table). The iPad does a really nice job of surfing the Web, displaying photos, and playing videos, and it taps into Apple’s ever-growing library of apps. After fiddling with Need for Speed on the iPad, I can say this is a killer gaming device, making the iPad the ultimate gadget for couch potatoes. And because of its extreme mobility and up to 10 hours of battery life, you can take this tablet anywhere. But is this really a substitute for a cheap mini laptop? Nope.
Dimensions, Ports, and the iCase
Because the iPad is like a supersized iPod touch, it shares many of the same strengths and weaknesses. But lets start with with the positives. Measuring 0.5 inches and weighing 1.5 pounds, the iPad is a gorgeous piece of hardware. The 9.7-inch display (1024 x 768 pixels) picks up a fair number of fingerprints but it is bright and crisp, a perfect canvas for photos, Web pages, and full-screen videos. The top side has the 3.5mm jack, and the bottom houses the dock connector, which fits into such accessories as the keyboard dock and carrying case. The right side of the iPad has the volume controls, and up front is single home button (just like the iPod touch and iPhone). The back of this tablet is decked out in aluminum, lending the iPad a high-end feel for just $499.
What the iPad Needs
It’s what’s missing from the iPad that lessens its appeal. For example, you can’t multitask on this device, which we think is a big deal. A 1-GHz processor should be able to handle this capability. You also don’t get a camera, either for shooting or for video calls–another bummer. I imagine a lot of people want to make Skype calls on a device like this. In addition, the iPad doesn’t have GPS, so you can’t use it as a navigator (although I’m hoping the 3G version adds better triangulation than the stock Wi-Fi connectivity). And for a device that’s designed to bring you the full Web, the lack of Flash support is disappointing. The iPhone 3.2 OS that the iPad runs doesn’t offer this functionality.
Conclusion
Overall, the iPad is easily one of the best tablet computers yet, with a great multitouch interface, speedy performance, long endurance, and a fun gaming experience. We also think it’s a strong Kindle alternative for those who want an eReader with more versatility. However, a low-cost netbook can do a lot more than the iPad, including multitasking and video calls, and they offer a better text input experience. Do I want one? Yes. Would I be willing to shell out $499 or more? I’ll wait to make that call until I get one in for a full review (á propos, thx to MetzMate until then, for his experiences from the States). And 'till it gets through the ocean ;)
Apple Blames Demand for iPad's International Delay
April 13
It's the crazy demand, not the bungled supply, that will delay the iPad's global conquest, according to Apple(AAPL).
Apple says it will delay the international launch of its iPad tablet device for a month due to supply shortages.
iPad
The Mac maker says it has sold a half million iPads in the first week since the device's debut on April 3. But due to the strong U.S. demand and hefty pre-orders of 3G iPads, Apple said it's forced to delay the introduction of the iPad overseas.
"Faced with this surprisingly strong U.S. demand, we have made the difficult decision to postpone the international launch of iPad by one month, until the end of May," Apple said in a press release Wednesday.
Sounds like a raging success, unless you consider that Apple has reportedly again switched its iPad touch-panel suppliers in recent weeks, leaving the company possibly ill-prepared to supply the entire initial rush of iPad buyers.
So instead of finding fault with its own production management, Apple turned the table and blamed the robust demand for the device.
The countless international buyers waiting for their shot at the iPad will likely be disappointed by the delay, said Apple. "But we hope they will be pleased to learn the reason -- the iPad is a runaway success in the U.S. thus far," the company added in its release.
The upbeat spin on iPad delays abroad and the thin air at Apple's lofty levels helped push the shares up more than $3 to a new all-time high of $245.51 in early trading Wednesday. But by the afternoon, Apple shares had retreated slightly to $245.30.
It's the crazy demand, not the bungled supply, that will delay the iPad's global conquest, according to Apple(AAPL).
Apple says it will delay the international launch of its iPad tablet device for a month due to supply shortages.
iPad
The Mac maker says it has sold a half million iPads in the first week since the device's debut on April 3. But due to the strong U.S. demand and hefty pre-orders of 3G iPads, Apple said it's forced to delay the introduction of the iPad overseas.
"Faced with this surprisingly strong U.S. demand, we have made the difficult decision to postpone the international launch of iPad by one month, until the end of May," Apple said in a press release Wednesday.
Sounds like a raging success, unless you consider that Apple has reportedly again switched its iPad touch-panel suppliers in recent weeks, leaving the company possibly ill-prepared to supply the entire initial rush of iPad buyers.
So instead of finding fault with its own production management, Apple turned the table and blamed the robust demand for the device.
The countless international buyers waiting for their shot at the iPad will likely be disappointed by the delay, said Apple. "But we hope they will be pleased to learn the reason -- the iPad is a runaway success in the U.S. thus far," the company added in its release.
The upbeat spin on iPad delays abroad and the thin air at Apple's lofty levels helped push the shares up more than $3 to a new all-time high of $245.51 in early trading Wednesday. But by the afternoon, Apple shares had retreated slightly to $245.30.