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  • NAVAL IMPLICATIONS OF THE SOUTH OSSETIAN CRISIS

    NAVAL IMPLICATIONS OF THE SOUTH OSSETIAN CRISIS

    By John C. K. Daly

    Wednesday, September 10, 2008

     

    Last month’s confrontation between Russia and Georgia over South Ossetia had a maritime dimension that continues to expand. Russia deployed elements of its Black Sea fleet to Georgia’s coast during its military operations and subsequently sank several Georgian naval vessels in Poti. During the clash Russia dispatched 10 vessels from Sevastopol to the Georgian coast.

    Following the conflict, the United States determined to send humanitarian relief to Georgia but found its efforts constrained by the 1936 Montreux Convention. Now Moscow, clearly irritated by Washington’s intrusion into what it regards as its southern maritime frontier, has announced that it is deploying significant naval forces next month to the Caribbean for joint naval exercises with Venezuela. Kremlin spokesman Andrei Nesterenko told reporters, “Before the end of the year, as part of a long-distance expedition, we plan a visit to Venezuela by a Russian navy flotilla” (Izvestia, September 8).

    The Caribbean deployment is not insignificant, as it includes the guided missile cruiser Peter Velikii, the largest surface vessel constructed by the Russian Federation since the collapse of the USSR, along with the anti-submarine ship Admiral Chabanenko (El Universal, September 8). Venezuelan Rear Admiral Salbatore Cammarata Bastidas said, “This is of great importance because it is the first time it is being done [in the Americas].” For Caracas, next month’s deployment is a timely riposte to the American administration’s announcement earlier this year that it was reactivating its Fourth Fleet, last deployed in southern hemisphere waters during World War Two.

    In the aftermath of the South Ossetian confrontation, when the U.S. decided to dispatch humanitarian aid by sea to Georgia, it found its initial efforts constrained by the 1936 Montreux Convention, whose 29 articles limit the number of foreign warships that non-Black Sea powers can send through the Turkish Straits to no more than nine vessels with a total of 45,000 aggregate tons. Moreover, they could remain there for no longer than three weeks. The United States had initially considered dispatching the hospital ships USNS Comfort and the USNS Mercy, both converted oil tankers, but as each displaced 69,360 tons, they fell outside the Montreux convention limits. While Washington chafed under the restrictions, there was little it could do.

    Last month NATO dispatched four ships from its Standing NATO Maritime Group 1 to the Black Sea for an exercise scheduled last October. The flotilla included Spain’s SPS Almirante Don Juan de Borbon, Germany’s FGS Luebeck, Poland’s ORP General Kazimierz Pulaski, and the USS Taylor. On August 22 the USS McFaul guided-missile destroyer loaded with humanitarian aid passed the Bosporus headed for Georgia with supplies such as blankets, hygiene kits and baby food, to be followed two days later by the USCGC Dallas cutter passing the Dardanelles. The USS Mount Whitney was also dispatched into the Black Sea with humanitarian aid, which it offloaded in Poti (Stars and Stripes, September 2).

    Before the Montreux Convention was negotiated, both Turkey and Russia had suffered from foreign naval intervention through the Turkish Straits during and after World War One. The Gallipoli campaign was preceded by a joint Anglo-French maritime effort in March 1915 to force the Dardanelles, and the Royal Navy subsequently occupied Constantinople after the war and dispatched vessels into the Black Sea to assist anti-Bolshevik forces.

    The Montreux Convention was intended to replace the 1923 Treaty of Lausanne, which had demilitarized the Bosporus and Dardanelles. Given their recent experience, both the Soviet Union and the Turkish Republic were interested in limiting foreign warships in the Black Sea; and for Ankara, the Montreux Convention was the first international agreement that fully acknowledged its sovereignty and position as successor to the “sick man of Europe,” the Ottoman Empire. Britain, Bulgaria, France, Greece, Japan, Turkey, the Soviet Union, and Yugoslavia ratified the Montreux Convention, which formally recognized Turkish sovereignty over the Turkish Straits. Given that Britain at the time was the predominant naval power in the Mediterranean, the United States was so uninterested in the diplomatic conference that produced the convention that it did not even send an observer to the negotiations.

    The Russian media is now reporting that Washington is negotiating with Georgia and Turkey to establish a naval base at one of Georgia’s Black sea ports in Batumi or Poti, but Ankara is reportedly carefully assessing its position in order to avoid further political tension with Moscow (Gruziya Online, September 7). In a replay of a dispute earlier this year, Russia has temporarily blocked the shipment of Turkish produce into Russia, citing sanitary concerns; and the dispute, which has cost Turkey an estimated $500 million in lost trade, has triggered speculation in the Turkish media that Russia is trying to punish Turkey for allowing U.S. warships to transit the Bosporus (Hurriyet, September 8).

    For those with a sense of history, a factor behind the 1962 Cuban missile crisis was Washington’s deployment of Atlas IRBMs in Italy and Turkey, which, in the wake of the confrontation, Washington quietly agreed to remove, as the development of ballistic missile submarines, the final component of Washington’s nuclear triad, obviated the need for forward basing of nuclear missiles off Russia’s southern shore. Forty years later, Turkey, sea power, and the Caribbean as subplots in rising U.S.-Russian tensions seem as interconnected as ever.

  • The Fannie and Freddie Rescue WELLINGTON LETTER

    The Fannie and Freddie Rescue WELLINGTON LETTER

     

    September 8, 2008 Volume 31: No. 17

     

    SPECIAL BULLETIN

     

    The Fannie and Freddie Rescue

     

    THE BIG NEWS EVENT OF THE WEEKEND

     

     

    On Sunday, Sept. 7, the Federal government announced that it would be putting Fannie Mae and Freddie Mac into “conservatorship.” The CEO’s of both firms will be replaced and the dividends will be eliminated.

    The Treasury Department said it will immediately receive $1 billion in senior preferred stock, paying 10 percent interest, from each company. Over time, the government could be required to put up as much as $100 billion for each if the funds are needed to keep them afloat as losses mount. You can bet that the actual total will be many times that.

    The government will also receive warrants representing ownership stakes of 79.9 percent in each company. Apparently that means that shareholders would not be wiped out, but they would lose about 80% of the company. That’s substantial dilution.

    Furthermore, dividends on both common and preferred stock would be eliminated, saving about $2 billion a year. Mid-size and small banks own a lot of the many different classes of the preferred for their high dividends. With the dividend eliminated, what is the reason to own them? Some banks will take a substantial bath on these investments.

    STOCK MARKET

     

     

     

    However, the Treasury will not let these banks fail. Bloomberg reported:

     

    The Federal Reserve and three other bank regulators said that they will work to “develop capital restoration plans” with the “limited number” of smaller institutions that hold Fannie and Freddie stock as a significant portion of their capital.

    By ensuring that Fannie and Freddie maintain positive net worth, the Treasury will provide “additional security” to the owners of Fannie and Freddie bonds and “additional confidence” for the holders of their mortgage-backed securities, it said. The Treasury noted that Fannie and Freddie securities are held by central banks and “investors around the world.”

     

     

    In plain English, the banks will not have to write down the value of these securities immediately.

    The former president of the St. Louis Fed, William Poole, told Bloomberg that “I would not be surprised if their total losses aggregate about 5 percent of their obligations” of about $6 trillion. In my view, that’s much too conservative. I think the loss will be at least 20% of the portfolio, which would be over $1 trillion.

     

     

    Note that the takeover is by the government, not the Federal Reserve. After all, the Fed is not owned by the government, although most people think it is. However,the future status of these firms is still unclear. Treasury Secretary Henry Paulson said that “only Congress” can tackle the “inherent conflict” of serving both shareholders and a public mission. Currently, the plan doesn’t address the question of whether the companies will be nationalized, privatized or kept as government-sponsored enterprises that are shareholder owned.

     

    I think a significant part of the statement is that the Treasury said it would reduce the portfolios of both companies by 10 percent a year starting in 2010. That is a big negative because most private mortgage companies are already not lending. If these two GSE’s reduce lending, instead of expanding it, it means that the housing debacle will continue. And only a turnaround in housing can hope to stop the current credit contraction that is leading the world into a financial crisis.

     

    What is likely to happen to the markets?

     

    The initial “sigh of relief” rally may be much shorter than the bulls would like. Yes, the Fannie and Freddie problems are resolved – for now. The fact that the Treasury took these steps confirms that the liquidity situation of both firms was getting critical. But the rescue had already been built into the markets over the past seven weeks. It was obvious that the government could not let them fail.

    So, what’s for an encore? Does it resolve the write-down problems of assets in the banking system? What about the Wall Street firms? And what about the future problems of the private equity firms as their acquired companies have trouble making debt service?

     

     

    The serious problems are still out there. Everyone knew that these two GSE’s would not be allowed to go out of business. That is no surprise. It only gives a psychological boost, but it will take more than psychology to compensate for trillions of dollars of derivatives melting down.

    What will be the reactions in the markets? The dollar will have a brief rest in its strong rise, meaning a brief correction before it goes higher. That will also cause a brief pop in the commodity markets, including the precious metals. Late last week, these markets had met first technical levels which normally causes brief counter-trend moves. No one can know if the rally will last one or two days, or maybe even a week. In fact, it may not even last to the end of Monday. We will see. But an end to the credit crisis is far, far away.

     

     

    Its important to remember that everything that the Fed and the U.S. Treasury have done over the past 12 months, which includes the Fed using half its balance sheet, i.e. $400 billion of Treasury securities, has not resolved anything, but only prolonged the inevitable.

     

    The major indices last week started breaking down to new bear market lows, unemployment is soaring, and the economy is in a certain recession which the guys with their Ph.D.’s won’t recognize until next year.

    The ill-defined Fannie and Freddie bailouts won’t be any different. It’s like using an aspirin to fight terminal cancer.

     

    THE SILENT CREDIT CRUNCH AND THE ECONOMY

     

    While the bullish analysts tell you about the good earnings of companies, and the exciting “widgets” they make, and the virtually unlimited demand for them, they totally ignore the primary driving factor in economies and investment markets, i.e., credit availability. Without credit, economic growth comes to a screeching halt.

    And that’s where we are now. Most banks can’t lend because they are close to their capital reserve requirements. They must raise more capital, which is very difficult, or just stop lending and call in loans.

    Major firms, such as Lehman, Fannie Mae, Freddie Mac, GM, Ford, etc. are totally unable to raise long-term capital to strengthen their balance sheets. Their preferred stock yields, and yields on long-term debt, are sky high, implying that the market believes they will not be able to survive. The preferred issues yield from 13%-18%. They can’t raise new capital issuing new preferred at these yields, as it would accelerate their demise. GM’s short-term debt is now yielding well over 20%. Investors obviously are not worried about the return ON their money, but OF their money.

    Apparently, many investors are being fooled by the $4-5 billion write-offs repeatedly taken by large financial firms. The amounts seem manageable, so they don’t worry. But you have to add them up. For example, MER wrote down $5.5 billion last October. It got a capital injection from Singapore to compensate. However, at this time, the write-offs of MER amount to $48 billion.

     

     

    Hundreds of billions of dollars in short-term financing used to be conducted in the commercial paper (CP) market. Consider these Federal Reserve figures on commercial paper outstanding: The “asset-backed” CP outstanding has plunged by about $500 billion dollars, or 40%, from last year’s peak of about $1220 billion. That’s the biggest decline of any credit market in history. How can anyone believe that it won’t cause a serious recession?

     

    However, there is a small positive, namely that “non-financial commercial paper” has seen a rise lately. This is the CP issued by large, non-financial companies. It means that someone is able to raise money in the commercial paper market.

    But it’s the banks that usually provide credit to smaller and mid-size firms. They are not able to do so now except on a minor scale. And that’s where the problem lies. During the 14-year stagnation in Japan, the banks could basically not lend because they were still loaded up with all the bad loans created during the 1980’s bubble. Their government should have created a mechanism to get those bad loans out of the banks so that they could lend again. The Fed knows the Japanese problem, and is trying to make sure that it doesn’t happen in the U.S. Their answer is “Term Facilities,” where the Fed trades liquid U.S. Treasury paper it holds for the illiquid paper assets held by the banks. But these are loans, not permanent capital infusions.

    While the Fed holds these securities, they continue to lose value. Wouldn’t the banks be smarter to just dump them before they become worthless? They probably hope that eventually the Fed, or the Treasury, will just keep them, because reversing the swaps would mean instant bankruptcy for the banks, as they have to write down the value.

    Values of all these paper “assets” are shrinking. Merrill Lynch recently dumped its CDO’s, which was a smart move. These CDO’s were declining every day, and finally MER decided to get a dwindling asset off of its books before everyone else decides to dump their own holdings.

    Mortgages held by financial institutions are losing their value on a weekly basis. The huge bond investment firm, PIMCO, estimates that $5 TRILLION of mortgage loans are in the “risky asset” category. That’s about 40% of all mortgages. If you are one of the bulls, just think, how can the Fed, or the Treasury, bail out $5 trillion in bad mortgages?

    RAISING RATES? IDIOTIC!

     

    The credit crunch is worsening, yet a number of economists, including some presidents of Federal Reserve districts, are urging the Fed to raise interest rates. This is a great argument for not letting human beings be in charge of something as important as setting interest rates. The markets can do a much better job. The hawks on rates fail to see that the “low” Fed Funds rate of 2% has nothing to do with market rates, which is what the average person, and the average corporation, pay. The low Fed Funds rate creates a steep yield curve, which allows banks to improve their profitability. Higher rates will cause more bank failures. Is that what we want?

    This technique of creating a steep yield curve helped resolve the banking crisis of 1990-1991. Banks borrow at the low short-term rates and invest the money into much higher-yielding U.S. Treasury bond rates, thus making a nice profit. That is also the reason that the prices of these Treasuries continue to rise, totally confusing economists who have been saying that bond prices should decline because of higher inflation. These economists just don’t know how the markets work.

    The number of business bankruptcy filings rose 42% in the 12-month period through June 30. The numbers are still relatively small, but the trend is definitely negative.

     

     

    GMAC and its Residential Capital LLC home lending unit announced that they plan to fire 5,000 employees, or 60 percent of the staff, and close all 200 GMAC Mortgage retail offices because of weak real estate markets. Loans originated by outside brokers through the company’s Homecomings unit will cease and business lending will be curtailed, the company said.

     

    And that’s how credit becomes tighter.

     

     

    Ford reported that domestic sales fell 27% in August. That’s the 21st decline in 22 months. Ford is reducing its planned second-half production in North America by 50,000 vehicles. In July, sales of U.S. carmakers declined to the lowest sales rate in 16 years.

     

    Meanwhile, Nissan of Japan reported that its sales gained 14%. What’s wrong with Detroit management?

    REALITY IS NOW BECOMING RECOGNIZED—BUT SLOWLY

     

    We are now coming to the phase of the bear market and recession where there is a realization by the majority of the investment establishment that the credit crunch is accelerating. Such an acceleration acts like an avalanche, where the lenders and other sources of liquidity suddenly realize that their previous “bargain hunting” has resulted in big losses and they are no longer willing to provide capital.

    Banks shut their lending windows for two reasons: they don’t have the capital, and they don’t want to take the risk.

    Bill Gross, founder of PIMCO, the largest bond firm in the world, and a very astute analyst of the credit markets, was very candid and revealing last week on CNBC. He admitted that PIMCO had been too quick to provide capital to financial firms early this year when they thought the worst was over.

     

     

    Obviously, they don’t subscribe to our WELLINGTON LETTER, where we warned last year that the bargain hunters were much too early. He said that currently, they and other investment firms are no longer willing to provide capital.

     

    He said that, to resolve the current crisis, the financial markets need $500 billion of capital. This is huge.

     

    No one can provide that except the government. Remember, the investments by the large, foreign “Wealth Funds,” which invest in governmental surpluses, have been investing the amount of $4-6 billion. And they now hesitate to invest more. Well, the $500 billion required is nowhere to be found, except at the U.S. Treasury printing press.

    Late last year we said that a capital infusion of that much by the Federal government was the only way to restore confidence, not the small amounts of $20 billion and $50 billion which the Fed actually did provide. Paulson had it right a few months ago when he said that when everyone knows you have a bazooka, instead of a little pistol, you don’t have to use it.

    Of course, at that time, most of the policy makers in Washington didn’t even think there was a crisis. Our leaders in Washington are reactive. When the meltdown really gets going, they’ll start scrambling. But wouldn’t it be better for them to come up with a program now, totally avoiding the next crisis?

     

    This is why bargain hunting right now in any asset, except U.S. Treasury bonds, is a sure loss investment. We are seeing the greatest un-leveraging in the history of the world. That means everything gets sold. And when it’s sold, the seller searches for a safe place for that money. The only safe place is U.S. Treasuries. As I wrote in March this year, I believe that we could even see a short period where investors will be willing to get a zero yield on 30-day T-bills, or less, just to have their money safe. Advice: avoid all money market funds which have other than U.S. Treasury securities.

    I gave the same advice in the middle of last year. But institutional investors thought they could improve yield by buying

     

     

    “Auction Rate Securities

    ” that were sold by Wall Street as being the same as money market funds. Well, now these securities cannot be sold. There is no market.

    The next wave of crisis is not far away, even with the rescue of Fannie and Freddie.

    (Note: Our next issue will be published in one week and will include the normal, complete assessment of the investment markets, with charts.)

     

    Seminar Appearance, Bert Dohmen

     

    I will be participating at a great seminar in Los Angeles (Century City) conducted by my long-time friend, Donald McAlvany. IT’S FREE! Details:

     

     

    Don McAlvany and David McAlvany cordially invite you to attend their

     

     

    FREE

    financial and geo-political briefing. Please make plans to attend an in-depth analysis on the following topics:

     

    ~ Death of the Dollar: The Ramifications of Losing the Status of the “World Reserve Currency”

    ~ Changing of the Guard: How to Prepare for a Global Shift of Power

    ~ Banks on the Brink: Your Money & How Safe Is It?

    ~ Mega Crash: The Coming Derivatives Meltdown

    Hyatt Regency Century Plaza, 2025 Avenue of the Stars, Los Angeles, CA 90067

     

     

    Tuesday, September 23

     

    rd at 6:30-PM

     

    Call 800.525.9556 x118 to Guarantee Your Place

    The seminar is FREE! I will be on a small panel to discuss some of the important situations in the markets and answer questions from the audience.

     

    Greetings,

    Bert Dohmen

     

     

  • Poll: Convention lifts McCain over Obama

    Poll: Convention lifts McCain over Obama

    By Susan Page, USA TODAY
    WASHINGTON — The Republican National Convention has given John McCain and his party a significant boost, a USA TODAY/Gallup Poll taken over the weekend shows, as running mate Sarah Palin helps close an “enthusiasm gap” that has dogged the GOP all year.

    McCain leads Democrat Barack Obama by 50%-46% among registered voters, the Republican’s biggest advantage since January and a turnaround from the USA TODAY poll taken just before the convention opened in St. Paul. Then, he lagged by 7 percentage points.

     

    CONVENTION: GOP rejuvenated

     

    The convention bounce has helped not only McCain but also attitudes toward Republican congressional candidates and the GOP in general.

    “The Republicans had a very successful convention and, at least initially, the selection of Sarah Palin has made a big difference,” says political scientist Larry Sabato of the University of Virginia. “He’s in a far better position than his people imagined he would be in at this point.”

    FIND MORE STORIES IN: George W Bush | Barack Obama |John McCain | Republican National Convention | University of Virginia | Joe Biden | Sarah Palin | Larry Sabato

    However, in an analysis of the impact of political conventions since 1960, Sabato concluded that post-convention polls signal the election’s outcome only about half the time. “You could flip a coin and be about as predictive,” he says. “It is really surprising how quickly convention memories fade.”

    McCain has narrowed Obama’s wide advantage on handling the economy, by far the electorate’s top issue. Before the GOP convention, Obama was favored by 19 points; now he’s favored by 3.

    The Republican’s ties to President Bush remains a vulnerability. In the poll, 63% say they are concerned he would pursue policies too similar to those of the current president. Bush’s approval rating is 33%.

    In the new poll, taken Friday through Sunday, McCain leads Obama by 54%-44% among those seen as most likely to vote. The survey of 1,022 adults, including 959 registered voters, has a margin of error of +/— 3 points for both samples.

    Among the findings:

    • Before the convention, Republicans by 47%-39% were less enthusiastic than usual about voting. Now, they are more enthusiastic by 60%-24%, a sweeping change that narrows a key Democratic advantage. Democrats report being more enthusiastic by 67%-19%.

    • Alaska Gov. Sarah Palin, a national unknown before McCain chose her for the ticket 10 days ago, draws a strong reaction from voters on both sides. Now, 29% say she makes them more likely to vote for McCain, 21% less likely.

    Obama’s choice of Delaware Sen. Joe Biden as running mate made 14% more likely to vote for the Democrat, 7% less likely.

    • McCain’s acceptance speech Thursday received lower ratings than the one Obama gave a week earlier: 15% called McCain’s speech “excellent” compared with 35% for Obama.

  • OSC: Russia- Iran Alliance?

    OSC: Russia- Iran Alliance?

    Informed Comment

    Thoughts on the Middle East, History, and Religion

     Juan Cole is President of the Global Americana Institute

     

    Saturday, August 30, 2008

    The USG Open Source Center translates an article from the Russian press proposing a strategic alliance between Russia and Iran.

    Pundit on Possible Russia-Iran Alliance To Counter ‘Unfriendly’ US Moves
    Article by Radzhab Safarov, General Director of the Russian Center for Iranian Studies: “Iranian Trump Card. Russia Can Take Control of Persian Gulf”
    Vremya Novostey
    Friday, August 29, 2008
    Document Type: OSC Translated Text

    The recognition of South Ossetia’s and Abkhazia’s independence by Russia is a timely step to protect these republics from new Georgian aggression. However, taking into account the United States’ plans to expedite Georgia’s and Ukraine’s accession to the NATO military-political bloc, the situation near the Russian border remains alarming. At the same time Moscow has a lot of possibilities to take balanced counter measures to the United States’ and entire NATO’s unfriendly plans. In particular, Russia can rely on those countries that effectively oppose the United States’ and their satellites’ expansion. Only collective efforts can help to create a situation which would, if not eliminate then at least reduce the risk of the Cold War’s transformation into local and global conflicts.

    For instance, Moscow could strengthen its military-technical ties with Syria and launch negotiations on the reestablishment of its military presence in Cuba. However, the most serious step which the United States and especially Israel fear (incidentally, Israel supplied arms to Georgia) is hypothetical revision of Russia’s foreign policy with regard to Iran. A strategic alliance presuming the signing of a new large-scale military political treaty with Iran could change the entire geopolitical picture of the contemporary world.

    New allied relations may result in the deployment of at least two military bases in strategic regions of Iran. One military base could be deployed in the north of the country in the Iranian province of Eastern Azerbaijan and the other one in the south, on the Island of Qeshm in the Persian Gulf. Due to the base in Iran’s Eastern Azerbaijan Russia would be able to monitor military activities in the Republic of Azerbaijan, Georgia and Turkey and share this information with Iran.

    The deployment of a military base on the Island of Qeshm would allow Russia to monitor the United States’ and NATO’s activities in the Persian Gulf zone, Iraq and other Arab states. With the help of special equipment Russia could effectively monitor whois sailing toward this sea bottleneck, from where, and with what cargo on board to enter the World Ocean or to return.

    For the first time ever Russia will have a possibility to stop suspicious vessels and ships and inspect their cargo, which the Americans have been cynically doing in that zone for many decades. In exchange for the deployment of its military bases Russia could help the Iranians to deploy modern air defense and missile defense systems along the perimeter of its borders. Tehran, for instance, needs Russia’s modern S-400 SAMs.

    The Iranian leadership paid close attention to reports stating that the Georgian Government’s secret resolution gave the United States and Israel a carte blanche to use Georgian territory and local military bases for delivering missile and bomb strikes against Iranian facilities in the event of need. Another neighbor, Turkey, is not only a NATO member, but also a powerful regional opponent and economic rival of Iran. In addition to this, the Republic of Azerbaijan has become the West’s key partner on the issue of transportation of Caspian energy resources to world markets. The Iranians are also concerned at Baku’s plans to give Western (above all American) capital access to the so-called Azerbaijani sector of the Caspian Sea, which is fraught with new conflicts, because the legal status of the Caspian Sea has not been defined to date.

    Russia and Iran can also accelerate the process of setting up a cartel of leading gas producers, which journalists have already dubbed the “gas OPEC.” Russia and Iran occupy first and second place in the world respectively in terms of natural gas reserves. They jointly possess more than 60 percent of the world’s gas deposits. Therefore, even small coordination in the elaboration of a single pricing policy may force one-half of the world, at least virtually entire Europe, to moderate its ambitions and treat gas exporters in a friendlier manner.

    While moving toward allied relations, Russia can develop cooperation with Iran in virtually all areas, including nuclear power engineering. Russia can earn tens of billions of dollars on the construction of nuclear power plants in Iran alone. Tehran can receive not only economic, but also political support from Russia in the development of its own atomic energy sector.

    In addition to this,in view of the imminent breakup of the CIS from which Georgia already pulled out, Russia could accelerate the process of accepting Iran as an equal member of the Shanghai Cooperation Organization (SCO). By accepting Iran, one of the key countries of the Islamic world, the organization could change fundamentally both in terms of its potential and in terms of its regional role. Meanwhile, as an SCO member Iran will find itself under the collective umbrella of this organization, including under the protection of such nuclear states as Russia and China. This will lay foundations for a powerful Russia-Iran-China axis,which the United States and its allies fear so much.

    (Description of Source: Moscow Vremya Novostey in Russian — Liberal, small-circulation paper that sometimes criticizes the government)

    posted by Juan Cole @ 8/30/2008 12:05:00 AM

    15 Comments: 

  • Amerikan Senatorleri NASIL SATIN ALINIR : Buying Policies of Armenian American nationalists

    Amerikan Senatorleri NASIL SATIN ALINIR : Buying Policies of Armenian American nationalists

    PoliGazette takes a closer look into the financial records of US Senator Menendez (D NJ). His vote can and has been bought.

    One of the main things Americans frequently complain about is the influence of special interest groups over politicians and, thus, over how the United States is ran. Too many laws, these Americans say, are designed not with the best interest of the American people in mind, but with the interest of said groups in mind. This is, Americans rightfully complain, now how the US government was meant to function.

    In recent months and years some Democratic politicians have constantly functioned as mouthpieces for one of those special interest groups; Armenian American nationalists. For some, for most Americans, unknown reason, these Democratic Senators and Representatives bring the events of 1915 which they call the Armenian Genocide up whenever they can. This obsession with something that happened almost 100 years ago resulted in an international controversy when one of the first acts of the Democratically controlled US Congress after the elections of 2006 was to adopt a resolution that labels said events officially as ‘genocide.’

    Turkey denies that what happened constitutes genocide and argues, instead, that historians, not politicians, should cast judgment on this affair. In response to the resolution Turkey threatened to withdraw its support for the War in Iraq and, more importantly, would no longer allow the US to use Turkey (to move troops, material, etc.) in order to fight and thus win in that Middle Eastern country.

    Americans wondered what happened to their government; why was the war put at risk? Why were American lives put at risk? Why this sudden obsession with something that has no relation whatsoever with America?

    PoliGazette has the answers to those questions. As usual it is about one thing only: money.

    One of the most fervent supporters of the Armenian cause in the United States is Senator Robert Menendez. He is one of the Senators who blocked George W. Bush’s nomination for ambassador to Armenia; when Bush wanted to send that person, Menendez blocked the nomination because the nominee refused to call what happened to the Armenian as ‘genocide.’ Later Bush nominated another diplomat, and once again Menendez objected, etc. In the end, though, Marie Yovanovitch was finally confirmed.

    And once again Americans wondered what the hell just happened. Why was Menendez so passionate about this subject? Why is history politicized?

    As said, it is about one thing, and one thing only; money. PoliGazette’s Kemal (who did most of the work) and me, Michael, took a closer look at the financial records of Senator Menendez and found that he has been paid and bought by Armenian activists. All in all, this Senator received some $136,000 from Armenian action committees and individuals; quite a gigantic sum.

    Below follows the complete record of Armenian donations to Senator Menendez. I’ll summarize the findings here, for details, scroll down to the records.

    One of the first things one notices about the Armenians who donated to Senator Menendez is that many of the Armenian donaters do not live in New Jersey. This means that he is not representing them, since American Senators represent a specific part of the population who are able to vote him or her in and out of office. In other words, a sizable part of Menendez’s donaters are not his constituents.

    Since he does not represent them nor their regional interests, common sense dictates that he works for them in other areas. This is, obviously, the Armenian Genocide issue. Menendez has become one of the most vocal US Senators on this subject.

    Another interesting aspect of Menendez’s financial records is that he receives a lot of money from Armenian organizations, or PACS. These PACS are special interest groups, who often only deal with one subject. The Armenian PACS that donate to Menendez are the Armenian American PAC and the Armenian Americans Legislative Issues Committee. Together these PACS have donated $25,746 to Menendez.

    Menendez’s own financial records taken from the Federal Election Commission’s website show that this one, individual Senator alone has received $136,481 from Armenian organizations and individuals, many of whom not constituents of this Democratic Senator for New Jersey. This amount, a significant amount, has caused Menendez to focus a lot of time and attention to the Armenian ‘Genocide’ issue and has, directly, resulted in international controversies and worsening relations with America’s allies.

    Here follow the details. Names of individuals are published because those records are available and open to the public already at other places.

    DETAYLI LISTE ICIN / FULL INFORMATION OF AMERICAN SENATOR BUYING DETAILS  OF ARMENIANS ARE BELOW

    AND SOME COMMENTS FROM THE NEWSPAPER ARE POSTED BELOW

  • Watch Senators Obama and McCain – LIVE

    Watch Senators Obama and McCain – LIVE

    : Watch Senators Obama and McCain LIVE  / saatler newyork saati ile verilmisdir, Turkiyenin & saat gerisindedir

     

     

    Dear Kayaalp BUYUKATAMAN, President CEO TurkishForum

    In less than 24 hours, AARP CEO Bill Novelli hosts separate, live sessions via satellite with Senators Barack Obama and John McCain at the AARP Life@50+ National Event!

    You can WATCH BOTH EVENTS LIVE on AARP’s special streaming webcast.

    Saturday, September 6

    Watch Senator Barack Obama at 8:30 a.m. ET
    www.aarp.org/obamawebcast

    Watch Senator John McCain at 12:30 p.m. ET
    www.aarp.org/mccainwebcast

    Since this morning, we have received more than 10,000 questions from AARP supporters asking how the senators will tackle the health care and financial security challenges facing the nation.  We’ll be asking some of those questions directly to them – but every question not asked will be personally delivered to Senators Obama and McCain.

    Don’t miss this exclusive opportunity tomorrow to hear their positions on the issues that matter most to you.

    Can’t catch the live streaming broadcast?  Watch a replay of the talks anytime at www.aarp.org

    Watch the webcast and then visit AARP’s blog, ShAARPsession, to tell us what you think.

    Sincerely,

    Barry Jackson
    AARP Online Advocacy Manager