Category: Authors

Patriot Missile Procurement Option Sparks Controversy in Turkey

Patriot Missile Procurement Option Sparks Controversy in Turkey

Publication: Eurasia Daily Monitor Volume: 6 Issue: 170September 17, 2009

By: Saban Kardas

The Turkish government’s possible purchase of missile defense systems from the United States, as part of an ongoing tender, has sparked a new debate on Ankara’s new regional policies and its domestic arms procurement projects. On September 9, the Defense Security Cooperation Agency (DSCA) notified the U.S. Congress of a possible sale to Turkey of 13 Patriot fire units, various Patriot missiles including the advanced capability (PAC-3) missiles, and other related support equipment. Raytheon Corporation and Lockheed-Martin are the principal contractors and if they are awarded the tender, the project is estimated to cost $7.8 billion. The statement described Turkey as the major U.S. ally in the region and added that by acquiring these systems Turkey will “improve its missile defense capability, strengthen its homeland defense, and deter regional threats” (www.dsca.mil, September 9).

Although this notice is a legal requirement for an ongoing tender, and did not mean a sale was concluded, the Turkish press widely covered this development and labeled it as one of the largest arms sales agreements in the country’s history. The extensive coverage of the story led to an impression that Ankara had already “decided to purchase” the Patriot systems.

The Turkish media maintained that Turkey wants Patriot platforms to defend itself against Iran and linked this decision to U.S. plans to build a missile shield. Others, by contrast, claimed that the U.S. decision was sparked by a concern to thwart Turkey’s negotiations with Russia over the purchase of the new generation S-400 platforms. Moreover, the Turkish press also highlighted that the country would be returning as a major customer of U.S. weapons systems, after having granted several multi-billion projects to other countries (Turkiye, Vatan, Hurriyet, September 13; Radikal, September 14).

To defuse such speculation, the Turkish defense ministry released a statement in which it said that the notice was part of Turkey’s ongoing international tender to acquire long-range air and missile-defense systems. Under this program, which was launched in June 2006, the under secretariat for the defense industry (SSM) issued a request for a proposal in April 2009 for the direct purchase of missile systems. The statement also underscored that in addition to the U.S. companies Lockheed Martin and Raytheon, requests for proposals were also sent to China’s Precision Machinery Import-Export Corporation (CPMIEC) and Russia’s Rosoboronexport. Moreover, since possible U.S. exports will take place under the Foreign Military Sales (FMS) credits, a separate letter of request was also sent to the U.S. administration (ANKA, September 14).

The statement, however, did not end the debate. Critics raised two questions: from whom Turkey plans to purchase these systems and whether this multi-billion dollar project is justified given the huge financial burden involved.

Several Turkish and international observers quoted by the Turkish press maintained that the project was developed to quell threats from Iran. They believe that despite its flourishing ties with Iran, Turkey still perceives a threat from Iran’s nuclear program. Through the missile defense system, allegedly, Turkey seeks to enhance its defensive capabilities against Iran’s medium-range Scud missiles or long-range Sahab missile program. To substantiate their arguments, they referred to a report submitted to the U.S. Congress in February 2008, (Chain Reaction: Avoiding a Nuclear Arms Race in the Middle East), in which it was stated that the United States should acknowledge Turkey’s concerns and contribute to its development of a missile defense capability (www.superonline.com, September 13; Vatan, September 15).

The congressional report concluded that considering Iran’s ballistic missile program has a range to strike any part of Turkish territory, combined with the prospect of eventual Iranian nuclear weapons capability, Turkey had concerns about the balance of power shifting in Iran’s favor. The report warned that if Turkey’s legitimate missile defense concerns were not met, it might opt for the development of a “Turkish bomb.” Since the U.S. plan for any future ballistic missile defense shield in Europe would not include Turkey, the report proposed that “the U.S. government should remove unnecessary obstacles to the speedy development of a missile defense system that addresses Turkey’s needs” (www.gpo.gov, February 27, 2008).

Several Turkish experts, however, criticized the plans for the purchase of this weapons system and the designation of Iran as a source of threat. Some speculated that this project is not driven by Turkey’s real needs. Rather, it is promoted by the “weapons lobby,” which is trying to make profits by sowing seeds of distrust between Turkey and its neighbors, Iran and Russia. They add that the media reports about Turkey’s perception of Iran as a threat are merely the manipulations of these weapons lobbies. Others maintain that “if this purchase ever takes place, it will be inflammatory, especially while Turkey is trying to be a peacemaker in the region” (Today’s Zaman; www.usak.org.tr, September 15).

Asked about how the purchase of these systems can be reconciled with the government’s policy of normalization with its neighbors, Foreign Minister Ahmet Davutoglu ruled out any specified target. “[Developing projects to meet our security needs] is not an alternative to [Turkey’s regional policies]. It does not mean that we perceive threats from any neighbors. Our policy of ‘zero problem with our neighbors’ is still intact” Davutoglu said (Cihan; ANKA, September 15).

The second line of criticism emphasizes the financial burden of the project. Some maintain that given the economic difficulties the country is experiencing and in light of the soaring budget deficit, such spending on expensive weapons systems, which in their view does not correspond to Turkey’s real security needs, cannot be justified. The critics call for redesigning Turkey’s defense procurement policies and significant cuts on arms expenditures (Taraf, September 14; Yeni Asya, September 16). Others emphasize that this development underscores an underlying problem: the lack of democratic and parliamentary scrutiny over Turkey’s arms procurement policy, which creates an imbalance between the country’s improving relations with its neighbors and the priorities of the military establishment (Taraf, September 16).

While improving relations with its neighbors, Turkey is also intent on hedging against future threats, reflecting the volatile nature of the region. Although as a member of the transatlantic alliance, it is a part of NATO’s security umbrella, Turkey realizes that in the past, there were problems in the activation of NATO security guarantees. Most notably, the dispatch of Patriot systems during the Gulf War (1991) and Iraq War (2003) were delayed due to intra-NATO disagreements, which fostered a legacy of developing national capabilities. Despite the domestic criticisms, the Turkish defense industry is unlikely to drop its plans to acquire missile defense systems any time soon.

https://jamestown.org/program/patriot-missile-procurement-option-sparks-controversy-in-turkey/

September 18, 2009
Poor Richard’s Report

Poor Richard’s Report

                                                                                                Over 300,150 readers

My Mission: God has uniquely designed me to seek, write, and speak the truth as I see it. Preservation of one’s wealth while providing needful income is my primary goal in these unsettled times. I have been given the ability to evaluate, study, and interpret world and national events and their influence on the future of the financial markets. This gift allows me to meet the needs of individual and institution clients. I evaluate situations first on a fundamental basis then try to confirm on a technical basis. In the past it has been fairly successful.

                             SPECIAL BULLITEN:

                             Our President is about to be Tested – Big Time

            The Middle East is about to blow sky high. We have now involved the UN Security counsel plus Germany (called P-5+1) to make Iran negotiate their nuclear weapons program. The due date is September 24, 2009. To make matters worse the President promised Israel that if they did not take military action with Iran, he would deliver crippling sanctions with Iran.

Big deal. What we withhold, China and Russia will deliver. This is now guts ball diplomacy that will reverberate across the whole world.

            Here is a scary and realistic scenario that could happen while everyone is concerned with what is going on in the kiddy pool of health care reform and economic recovery.

            ISRAEL will never, never allow itself to be at mortal risk. If and when their intelligence concludes the Iranians are close to getting a bomb, diplomacy will end. Russian expansionism has always been in the setting of somebody else’s war. Putin will ignite the match if he ever gets the chance. Imagine. They get Georgia without a contest, and open the door to secure Ukraine, and make trillions of Rubles selling “high test” to Europe after the Iranians close the Straits of Hormuz. It would stir up a real blizzard and they could retake the Baltic region while NATO is off figuring out how to get the gulf oil turned back on.

Buy GLD (NYSE-$99+) or CEF (NYSE-$13+) and top off your home fuel tanks.

Have a strong cash position also.

Richard C De Graff

256 Ashford Road

RER      Eastford Ct 06242

860-522-7171 Main Office

800-821-6665 Watts

860-315-7413 Home/Office

[email protected]

This report has been prepared from original sources and data which we believe reliable but we make no representation to its accuracy or completeness. Coburn & Meredith Inc. its subsidiaries and or officers may from time to time acquire, hold, sell a position discussed in this publications, and we may act as principal for our own account or as agent for both the buyer and seller.

September 17, 2009
Turkish Opposition Remains Skeptical of Government’s “Armenian Opening”

Turkish Opposition Remains Skeptical of Government’s “Armenian Opening”

Publication: Eurasia Daily Monitor Volume: 6 Issue: 169

September 16, 2009

By: Saban Kardas

Foreign Minister Ahmet Davutoglu met the leaders of opposition parties as part of his attempt to brief them about recent developments in Turkish foreign policy, and solicit their support for the government’s “Armenian opening.” On August 31, Turkey and Armenia announced the details of a roadmap for the normalization of bilateral relations. The parties initialed two protocols regulating the steps to be taken toward the resolution of contentious issues. To allay concerns among domestic opposition parties and in Azerbaijan, the Turkish government emphasized that the final decision would rest with parliament and that Baku’s views would be taken into account during the parliamentary approval process (EDM, September 8).

Since accomplishing the objectives of normalization would require bold steps and political determination on the part of the Justice and Development Party (AKP) government, this new initiative is denoted as the “Armenian opening,” echoing the recent Kurdish opening. Given the necessity of parliamentary approval, the focus of the policy on Armenia has shifted to the domestic political processes.

Davutoglu, at the urging of Prime Minister of Recep Tayyip Erdogan, has taken time out from his heavy international diplomatic agenda to win over the opposition parties for the normalization policy. Davutoglu met Deniz Baykal, the leader of the main opposition Republican People’s Party (CHP), and the leaders of the Democratic Left Party (DSP) and the Felicity Party (SP) Numan Kurtulmus and Masum Turker respectively. However, the Nationalist Movement Party (MHP) leader Devlet Bahceli, who has been the most outspoken critic of the Armenian opening, refused to meet him. Earlier, Davutoglu met Parliamentary Speaker Mehmet Ali Sahin, and he is scheduled to have additional meetings with the leaders of parties that received at least 1 percent of the popular vote in the July 2007 parliamentary elections. He also met the opposition leaders in May, following his appointment as foreign minister (Today’s Zaman, September 16).

One common theme emerging from Davutoglu’s contacts is that the opposition leaders unequivocally state that any progress in Turkish-Armenian relations needs to be contingent upon the protection of Azerbaijan’s concerns over Karabakh. In response, Davutoglu sought to reassure them that normalization with Armenia would not come at the expense of harming ties with Azerbaijan, and that Baku was being informed about the progress of Turkish-Armenian talks (Anadolu Ajansi, September 15).

Another common theme is the skepticism of the opposition parties toward the contents and the form of the Armenian opening, especially the involvement of foreign actors. They continue to view the opening as an agenda imposed upon Turkey by external forces, and believe that the main benefactor of the process will be Armenia.

For instance, SP’s Kurtulmus maintained that according to popular perceptions, the process seemed to be driven by Armenia, and that Turkey appeared to be only a passive player. He asked Davutoglu to correct this image. He also expressed his reservations about the committee of historians, and maintained that the committee would be unlikely to reach a decision disproving Armenian genocide claims. Kurtulmus also criticized the government’s recognition of Switzerland as the mediator between Turkey and Armenia, arguing that as a country that punishes the denial of the “Armenian genocide” claims, Switzerland could not be considered as impartial in this issue. DSP’s Turker, also shared similar concerns (Cihan, September 15).

The main opposition leader Baykal raised the most vocal criticisms. During the joint press brief after meeting with Davutoglu, Baykal noted that the CHP considered foreign policy issues as “state policies” that require a national consensus. He added that his party’s decision to meet Davutoglu was meant to make a contribution to state policy, and should not be interpreted as representing “support” for the government’s agenda. He stated his disappointment with the government’s overall approach to this issue, and reiterated his earlier position that the normalization agenda is imposed upon Turkey. “There is a process and a roadmap underway which is beyond the knowledge of the opposition parties. Now, through these contacts, the government is not asking ‘Let us discuss Turkey’s interests, and formulate [the policies] together.’ The government is saying to us. ‘We are given a roadmap. We decided to implement it; come, help us realize this roadmap.’ This is not an effort to formulate a policy. This is an effort to find support for a program that is already formed,” Baykal objected (ANKA, September 15).

Baykal also characterized the two protocols as “traps.” He argued that although the protocols satisfy Armenian concerns by laying out the details of Turkey’s re-opening of the border, they fall short of meeting Turkish demands regarding Armenia’s recognition of the Kars Treaty on defining the Turkish-Armenian border, or the renunciation of its policy of having its genocide claims recognized worldwide, and ending its occupation of Karabakh. He expressed concern that the protocols offered no safeguards against the possibility that after Turkey opens the border, Armenia might later renege on its promises. Therefore, he demanded that the government must refuse to sign the protocols. Baykal also speculated that the government would sign the protocols with Armenia on October 13 (Hurriyet, September 16).

Both the Turkish and Armenian governments have to tackle domestic opposition, in addition to the dilemmas of overcoming differences of opinion and building trust in the bilateral talks. Indeed, the Turkish-Armenian declarations recognize the challenges of obtaining broad-based social and political support, and give the parties six weeks to engage in domestic discussions before the protocols are forwarded to parliaments for final ratification.

Given the strength of nationalistic sentiments in Turkey, one challenge for the AKP government has been to present the Armenian opening as a “national” policy, rather than a parochial agenda promoted by the AKP, or a project externally imposed upon Turkey. The six-week deadline has provided an impetus for each government to stimulate debate on the issue, but as the Turkish case suggests this deadline is too unrealistic to facilitate any meaningful and genuine democratic deliberation on a dispute mired in historical memories and current geopolitical conflicts. Davutoglu’s meetings further show that a new conflict is looming over the AKP’s foreign policy when the Armenian opening comes before parliament.

https://jamestown.org/program/turkish-opposition-remains-skeptical-of-governments-armenian-opening/

September 17, 2009
Davutoglu’s Visit to Iran Highlights Ankara’s Regional Diplomacy

Davutoglu’s Visit to Iran Highlights Ankara’s Regional Diplomacy

Publication: Eurasia Daily Monitor Volume: 6 Issue: 167

September 14, 2009 04:19 PM Age: 1 days

By: Saban Kardas

Turkish Foreign Minister Ahmet Davutoglu paid an official visit to Iran on September 12-13. He met the Iranian President Mahmoud Ahmadinejad, Foreign Minister Manouchehr Mottaki, Parliamentary Speaker Ali Larijani and the Secretary of Iran’s Supreme National Security Council and Iran’s chief nuclear negotiator Saeed Jalili. Following his meeting with Mottaki, Davutoglu and his counterpart stressed the importance they attach to bilateral relations, as well as regional cooperation. Davutoglu noted that the two countries shared deep-rooted historical ties and their neighborly relations are based on the principle of refraining from interfering in each other’s affairs. He outlined many areas where they explored boosting bilateral relations, ranging from economic cooperation to security. Referring to this multi-dimensional partnership, Mottaki described Turkish-Iranian relations as “strategic” (Cihan Haber Ajansi, Anadolu Ajansi, September 12).

The foreign ministers emphasized that given the centrality of the threat of terrorism facing both countries, they will continue their collaboration in combating this phenomenon, referring to their joint efforts against the Kurdistan Workers’ Party (PKK) and the Party of Free Life of Kurdistan (PJAK). Davutoglu also highlighted the flourishing economic activity between the two countries, noting that the bilateral trade volume has reached $11 billion annually, despite the global economic crisis. In addition to discussing cooperation in various areas, the two main items on Davutoglu’s agenda were the nuclear issue and energy cooperation. Davutoglu’s meeting came in the wake of the announcement by Washington that it will consider holding talks with Tehran, despite the latter’s reluctance to discuss its nuclear program. Iran forwarded a proposal to the major powers expressing its readiness to discuss global nuclear disarmament, as well as other international issues. Although the White House did not find Iran’s proposals as responsive to its concerns about its nuclear program, it nonetheless showed interest in holding direct talks with Iran (Today’s Zaman, September 14).

Davutoglu reiterated Turkey’s position that the resolution of the nuclear problem should be based on mutual respect. He also conveyed to Jalili Turkey’s readiness to host negotiations between Iran and Western countries (Anadolu Ajansi, September 13). However, this is not the first time that Turkey has proposed to mediate between Iran and the West, and its previous offers failed to produce any practical results. Reportedly, both Washington and Tehran were reluctant to see Ankara play such a role (EDM, March 10). Following the press briefing with Davutoglu, Mottaki thanked his Turkish counterpart for Turkey’s support for Iran’s right to obtain nuclear energy (Anadolu Ajansi, September 12). Although Ankara remains eager to act as a mediator, what leverage it may hold to convince Tehran to compromise on the Western demands remains to be seen.

Energy was the other key issue on the agenda. Turkey has a major incentive to help solve the diplomatic problems bedeviling Iran’s relations with the West and bring Iran into the orbit of the European energy security discussions, a policy which is also supported by many European countries.

Turkey seeks to deepen its energy partnership with Iran, especially considering its efforts to become a major energy hub. Indeed, one of the biggest obstacles before the Nabucco project, which Turkey considers as a strategic priority, is finding suppliers, Iran is the most likely alternative, since it possesses the second largest gas reserves in the world. Turkey indeed has been eager to act as a bridge connecting Iranian gas to the European grid through Nabucco. Although Ankara signed a major energy cooperation deal with Iran in 2007, it had to suspend those plans due to American objections. U.S. sanctions toward Iran prevent the development of the Iranian gas sector and the export of its gas to Western markets. Since its fields are underdeveloped and it needs immense transportation infrastructure, Iran has not emerged as a major player in gas markets, and even has been forced to import gas from Turkmenistan to meet its domestic demand. Prior to the signing of the Nabucco inter-governmental agreement in Ankara, Turkish officials, including Prime Minister Recep Tayyip Erdogan emphasized their willingness to tap into Iranian gas, but U.S. officials reiterated their objection to the Iranian option (EDM, July 14). However, Davutoglu said that Turkey would work to help Iran export its gas to European markets.

Turkey’s Iran policy resonates well with the recent course of its regional diplomacy. Ankara has fostered closer regional dialogue with Iraq, Syria and other Arab countries in order to create a peaceful neighborhood and develop closer economic partnerships, including energy projects (EDM, August 12). Bringing Iran into the same circle is definitely a prime motive driving Ankara’s policies toward Tehran.

Davutoglu, as the architect of this policy, appreciates the central role that Iran plays in the region and expresses his aversion to any instability that might be caused by the ongoing diplomatic problems, as well as the developments in Iranian domestic politics. This concern, however, results in a status quo policy of supporting the Iranian government. As reflected in Ankara’s acquiescent attitude during the Iranian regime’s harsh crackdown on the protestors following the disputed presidential elections, Turkey was criticized for not being sensitive to domestic developments in Iranian politics (EDM, June 18).

Another underlying problem in Turkey’s Iran policy concerns the differing interpretations both parties attach to “regional cooperation.” Iran views regional cooperation as a way to limit the involvement of the West and the United States in regional affairs, as well as to exclude Israel. Turkey, in contrast, values its ties to the West and defines its regional policies in complementary terms. Indeed, such differences of opinion were apparent in Ahmadinejad’s statements following his meeting with Davutoglu, which contained strong anti-Western rhetoric. Ahmadinejad claimed that the improvement of Turkish-Iranian relations is an obligation “in a process whereby great and oppressor powers are in decline” (Anadolu Ajansi, September 12).

A major test for Turkey’s regional diplomacy might perhaps stem from its ability to foster closer cooperation among its neighbors, while also ensuring that it does not present an anti-Western platform.

https://jamestown.org/program/davutoglus-visit-to-iran-highlights-ankaras-regional-diplomacy/

September 16, 2009
Poor Richard’s Report

Poor Richard’s Report

Over 300,010 readers
My Mission: God has uniquely designed me to seek, write, and speak the truth as I see it. Preservation of one’s wealth while providing needful income is my primary goal in these unsettled times. I have been given the ability to evaluate, study, and interpret world and national events and their influence on the future of the financial markets. This gift allows me to meet the needs of individual and institution clients.

Economies Change Principles Never Do

In my July 2009 letter I wrote that I would not write a letter about investing for a year. Well, economies may change, but never the principles behind them. We have had the worst recession/depression since 1981-1982 and many have called an end to it.
Let me make one point vitally clear. Today’s stock markets are only for individuals who have extra funds. Funds that are “dear” should remain in a savings account at your local bank where you can watch it. We need a new congress to enact honest reforms that protect us.
Today’s economists look at all kinds of statistics and come up with many wrong conclusions. Alan Greenspan, former Federal Reserve Chairman, loves the picture of himself in the bathtub surrounded by stacks of financial garbage. If only he had walked around any random town or talked to any local bank or asked a few questions, things might be better today.
I turned bearish in January 2001 when the Fed lowered the discount rate Jan. 2 and again Jan. 3, 2001. That is the only time it was ever done two days in succession, I believe. Edson Gould’s “3 steps and stumble” rule was transformed into my “2 steps in a row and drop dead” rule.
So this letter will be more of my opinion and where I stand based upon clear observations.
Let me state right out that using today’s standards, the economy has bottomed. I use the word bottomed. We should see a mild recovery before we turn down again. The mainstream media will not tell you this because they are all selling something.
Small businesses grow into big business if they are fairly successful. They hire instead of layoff. They don’t need big bonuses, because the challenge is success and stock ownership. IBM is the only corporation to remain top-dog for over 60 years. J P Morgan is a close second.
Here is the problem, which we should have learned from the Japanese Economy. Government spending does not mean a hill of beans. What is a hill of beans? Nothing!
I believe Dr Bernanke’s helicopter speech was meant for the general public – not the politicians in Washington D.C. The “cars for clunkers” was an overwhelming success – short term. I believe this is why the economy bottomed or stopped going down- temporarily.
If the general public was given a trillion dollars and was told to pay down debts and to spend the remaining moneys wherever they wanted – you would see the overall economy pick up. We might have lost a few car companies, but that is “creative destruction” as one famous economist (Schumpeter) calls it. Small businesses hire and pay employees. Large corporations try to downsize and cut expenses after they have grown. Their earnings are shown with mirrors.
So there will be no follow-through with all the wasted government spending and this, coupled with more government borrowing and weaker dollar, will cause the economy to slide down again.
When I started in this business there was a very ugly word and it had to be used sparingly. It was USURY. Banks operate under the Rule of 72. Take whatever interest rate you are paying and divide it into 72. So if you have a 7% mortgage then 7/72 would mean that the bank would double its money every 10.29 years.
Millions of people who own homes today are getting crushed by Credit Card Companies reaping an immoral return on huge Satanic interest rates. Divide 15% into 72, that is 4.8 years for them to double their money. Paying lobbyists to bribe our Congress is child’s play to these companies. However, the homeowners are careful about what they spend in these scary economic times. They are waiting for price cuts, which is how deflation starts. Cutting prices brings in business, but that puts pressure on employees and companies to stay profitable let alone grow.
All economic bubbles create a deflationary trend wherever that bubble occurred. We have had several and the world has had its share. This makes consumers cautious. This slows down the economy while owners try to work down excess inventory. This is deflationary.
The US Government has to borrow trillions of dollars to pay for the misbegotten stimulus funds. Now take the interest rate THEY are paying. Divide that into 72 and that will give how many years it will take the bondholder to double his money. So, sooner or later we must borrow to pay interest rates. What goes around comes around. We are digging a bigger hole for ourselves and we don’t even have a shovel.
Bank Bonus versus Salaries
This is a simple problem. Brokers of any sort should never be put in charge of any financial institution. That is worse than putting a fox in the chicken coup. Bankers love a steady salary and following rules. They have their own code of conduct. Brokers hate salaries and a steady paycheck. They need the challenge of competition with a commiserate reward. Most brokers are left hand column readers. The left hand column normally has the sales credits and they check the fattest one first. Good left hand column readers get promoted and end up in management.
Banks should be able to form their own syndicate to bid on bonds and preferred stocks but not common stocks. Banks should be in charge of Money Market Funds and Brokers should not have cash management accounts. My point is that banks and brokers should be able to compete on a level playing field, but the more aggressive ones can go belly up in bad times. No government bail outs.
OFF Shore Drilling- Way out
Two deep water oil wells have recently been discovered in the middle of the Gulf of Mexico that hold billions of barrels of recoverable oil. Also Brazil has discovered light crude 200 miles off shore and they will become a major exporter in a few years. They will be competing with Saudi Arabia.
It is believed the outer continental shelf on our eastern seaboard holds giant finds. Just think, with our own over-supply of oil our President would not have to bow to oil kings.
Derivatives
My long time readers know that I hate derivatives with a passion. They are the Judas of the financial world. It is a complex transaction that derives something to give to someone else. It is a con-job designed to maximize sales credits (commissions) while placating the unwary (on both sides) into a false sense of security and pleasure (believing they have outsmarted everyone else), which is encompassed by a soap bubble that will be pricked over time.
All or almost all financial problems and disasters have the root cause in derivatives, from the Orange County California to Sub-prime and consequent bubbles. This has cost us more than Health Care ever will. We should ban all future derivative trades right now and then wait five years to see how much better off we are. The President can issue an edict. It is not how much money one makes but how you make it. There is no such thing as a free lunch.
More advice…..
Stay away from funds. Remember the sub prime mess started when the mixed AAA debt with junk bonds or sub prime notes.
The economy is struggling on a lower level and the debt coverage of many bonds is now suspected. Only the CFO and chief executive officers really know what is going on, and some cases they don’t even know. Directors only know what they are told. I have seen directors go down with the ship and they can’t even swim.
Buy Gold. GLD on the NYSE and CEF are my favorite choices. (Check out on the internet or consult with me about your concerns.) WE are not buying gold because of inflation, but as a hedge that the dollar collapses because of too much debt and a loss of confidence in it. Going back on the gold standard would shut the spending congress down.
Governments in the future will save for future social projects. This is due to the mess we are in now.
President Obama did the correct thing when he nominated Benjamin Bernanke for a full term as Federal Reserve Chairman. The Fed is supposed to be politically neutral. The chairman’s former students at Princeton thought he was a democrat when President Bush nominated him. This makes up for the error Donald T Regan, then Secretary of the Treasury under President Regan, made for canning Paul Volker because he was a democrat. Chairman Volker miffed, named Greenspan as his replacement as a joke, and they fell for it.
I love preferred stocks. Especially Amerco $2.125 cumulative preferred selling under its call price of $25. It is listening on the NYSE and is currently yielding in the 8% range. 85% of the dividend is considered tax free. That amount to an 11% tax free return. Remember the rule of 72! An easy way to keep tabs on this company is to check out the common stock. The common stock is U-HAUL. The symbol is UHAL. If it takes a sudden dive of 10% or more; it is a good chance the company is in trouble.
I love the Canadians because they have a strong pro-business economy. Their stocks got clobbered also, but their financial system is strong because their bankers thought before they acted. There is a lot of value up there.
Then there are some local small cap products that have a unique product that can have a positive affect in its application. Companies that provide a need where today there is a black hole. These are very speculative and can be bought in small lots until their fortunes improve over time.
Finally there is cash and lots of it. In deflationary times there are moments when the chance of a lifetime emerges IF you have CASH.
So right now I would keep as much cash available where you can retrieve it by writing a check or walking into your local bank for a cashier’s check.
I still believe we have a rough two years ahead of us with many false starts as far as investments go. The players today believe a new era has started and most are playing by the same rules. A major rule though is that most past leaders fade in the new market. They become a source of funds for new ideas and investments. Stocks that tanked into the teens and single digits have a high marble wall to surmount and you have an ice pick.
We could have a double dip, but the market could make new lows.
That is it for now.

Breaking News:
The Financial Times Headline dated September 15, 2009

OBAMA;
WALL ST
must
change

Compliance sought
with financial overhaul

developing ………………….
Cheerio !~!!!!

Richard C De Graff
256 Ashford Road
RER Eastford Ct 06242
860-522-7171 Main Office
800-821-6665 Watts
860-315-7413 Home/Office
[email protected]

This report has been prepared from original sources and data which we believe reliable but we make no representation to its accuracy or completeness. Coburn & Meredith Inc. its subsidiaries and or officers may from time to time acquire, hold, sell a position discussed in this publications, and we may act as principal for our own account or as agent for both the buyer and seller.

September 15, 2009
Turkish-Abkhazia Ties Test Turkey’s Strategic Partnership with Georgia

Turkish-Abkhazia Ties Test Turkey’s Strategic Partnership with Georgia

Publication: Eurasia Daily Monitor Volume: 6 Issue: 164

September 9, 2009

By: Saban Kardas

The plight of the Turkish captain of a tanker intercepted by Georgian authorities while carrying goods en route to Abkhazia highlighted the dilemmas of Turkey’s position on the Georgian-Abkhazian conflict.

Since the war last August, Georgia has blockaded the breakaway regions of Abkhazia and South Ossetia and has intercepted various ships carrying Turkish goods. In the latest incident, a vessel transporting fuel to Abkhazia was captured by the Georgian coastguard on August 17. Following the seizure, the Georgian authorities took the captains, one Turkish and the other Azeri, into custody. On August 31, a Georgian court sentenced them to 24 years in prison. The ship was confiscated and brought to Batumi port to be sold in an auction (Today’s Zaman, September 6).

Growing concerns over the fate of the Turkish captain generated domestic pressure on the government to free him, which prompted the involvement of Foreign Minister Ahmet Davutoglu. The Turkish foreign ministry announced that Davutoglu would visit Tbilisi and that the government would do everything possible to secure the release of the captain. Meanwhile, on September 4, the shipping company paid a fee, and it was announced that an appeals court would reconsider the case. Davutoglu visited Tbilisi on September 7-8, and a Georgian court released the Turkish captain on September 8 (Anadolu Ajansi, September 8).

The case highlighted tensions caused by similar practices by the Georgian authorities. Georgia has been seizing Turkish ships destined for Abkhazia, and in the past decade over sixty ships have been captured. Even prior to the latest crisis, representatives of Turkish exporters and Caucasian diaspora groups in Turkey raised concerns that the Turkish government was too complicit toward the “bullying” of the Georgian authorities.

Ahmet Hamdi Gurdogan, the head of the exporters association in the Black Sea region, advanced several criticisms of Tbilisi (www.tekilhaber.com, August 25). First, he maintained that although Georgia claims to block all the trade routes to Abkhazia, Georgian coastal patrols cannot do anything against vessels carrying the Russian flag en route to Abkhazia. In a related charge, he argued that the Georgian patrol boats captured the Turkish ships in international waters, even in some cases immediately after they leave Turkish territorial waters. Therefore, Turkish exporters expect the government to flex its muscles, yet considering that Turkey supports Georgia’s territorial integrity and the Georgian embargo in place, the government might do little to stop the interception of Turkish ships in Georgian waters. Nonetheless, during his press briefing on the recent case, a spokesman for the foreign ministry expressed Ankara’s concern that some of the seizures might have taken place in international waters, and Georgia’s actions may violate international maritime laws (www.denizhaber.com, September 2).

Turkish exporters also complain that the Georgians have turned such practices into an undeclared “piracy” in the Black Sea, since the Georgian authorities allegedly sell the vessels in auctions and demand large sums of money to release the crew of the captured ships. They also claim that in some cases, ships carrying humanitarian goods are also intercepted.

The representatives of the Abkhazian diaspora in Turkey, also utilize similar arguments, and urge the Turkish government to lift its embargo. Turkey still supports the economic sanctions imposed against Abkhazia by the Commonwealth of Independent States (CIS). Irfan Argun the Speaker of Caucasus-Abkhazia Solidarity Committee, for instance, maintained that the sanctions are creating a major humanitarian crisis in Abkhazia and that Turkey should end its policy of supporting the Georgian embargo and play a larger role in the resolution of the issue of Abkhazia (www.ajanskafkas.com, August 22). Around 500,000 Turkish citizens consider themselves to be of Abkhazian origin.

At a more fundamental level, this crisis reflects the underlying dilemmas in Turkish policy on the Georgian-Abkhazian dispute. In an analysis published by the Ankara-based think tank close to the foreign ministry, the Center for Middle Eastern Strategic Studies, it was maintained that Ankara could no longer ignore the new reality in the region and act on the presumption that there was no problem relating to Abkhazia (www.orsam.org.tr, September 1). This line of thinking suggests that Ankara might need to redefine its policies toward the region. It justifies a redefinition with reference to the fact that if the present Georgian embargo continues, it might result in a situation whereby Abkhazia is forced to integrate itself into the Russian orbit both politically and economically. The best way to reverse such a trend, according to this view, would be to end the blockade of Abkhazia.

Reflecting the demands of the Abkhazian diaspora, deputies from Republican People’s Party submitted a question to parliament. They lambasted the government’s silence and requested that the prime minister explain why the government still insisted on implementing the embargo (www.kafkasfederasyonu.org, August 22).

Meanwhile, the Georgian attempts to implement the blockade have raised tension in the Black Sea region. The Abkhazian leader Sergei Bagapsh described the activities of Georgian ships in “Abkhazian waters” as piracy, and threatened to destroy them if Georgia did not cease its military activities (Anadolu Ajansi, September 2). A Russian foreign ministry spokesman warned Georgia about its practice of seizing commercial vessels, and said “attempts to enforce a sea blockade on Abkhazia could lead to a serious armed incident” (Anadolu Ajansi, September 3).

Against this background, Davutoglu visited Tbilisi, where he met his Georgian counterpart Nikoloz Gilauri and President Mikheil Saakashvili. He held a lengthy meeting with Saakashvili about the release of the captain. Davutoglu described Georgia as a “strategic partner,” and reiterated Turkey’s support for its territorial integrity, and for Tbilisi’s NATO membership bid. Davutoglu said “We know very well that without ensuring Georgia’s peace and stability, it will be difficult to meet these goals in the South Caucasus” (Cihan, September 7).

In addition to the necessity of responding to the demands made by domestic pressure groups, the risk of Georgian-Abkhazian tensions escalating into a destabilizing regional conflict energizes Ankara to address Georgian-Abkhazian problems. The Turkish government values its partnership with Georgia, but it is also under pressure to realign its policies in light of the geopolitical transformations in the region. It will represent a major challenge for Turkish diplomacy in the days ahead to engage Abkhazia without severing ties with Tbilisi.

https://jamestown.org/program/turkish-abkhazia-ties-test-turkeys-strategic-partnership-with-georgia/

September 10, 2009