good news for a change

ITAR-Tass and Interfax have quoted Lebanese Defense Minister Elias Murr as saying that Russia has agreed to supply his country with 10 MiG-29 fighter jets. ITAR-Tass said the planes will be provided as aid. Murr spoke during Tuesday’s talks in Moscow with Russian Defense Minister Anatoly Serdyukov. – AP

noses in the trough

Madoff feeder funds levied high fees
Henny Sender, Financial Times, Dec 15 2008

The “feeder” funds that channelled money to Bernard Madoff charged their investors high fees that in some cases exceeded the norms of the hedge fund industry, people familiar with the matter say. Madoff received much of his funding from feeder funds run by so-called funds of hedge funds. These funds of funds are paid by investors to perform due diligence on hedge funds and allocate money among approved managers. Typically, funds of hedge funds charge a 1% management fee and take 0-10% of the profits. This would be in addition to the fees charged by the underlying hedge funds, which usually take a 2% management fee plus 20% of the profits above a certain level, known as the hurdle rate. Fairfield Greenwich, a feeder fund that invested $7.5b with Madoff, charged a 1% management fee and took 20% of the profits, according to a person familiar with the matter. Suzanne Murphy, managing director of Tri-Artisan, a hedge fund consultancy, said she believes other Madoff feeder funds charged fees similar to those at Fairfield Greenwich. At such levels, she claimed, “These organisations were more partners of Madoff than clients.” In general, generous arrangements such as large performance fees “raise questions about conflicts of interest and caveat emptor,” according to the general counsel of the alternative investment division of one bank. The head of the hedge fund practice at one law firm added : “At a certain point, if you get outsize compensation, you can argue that you lose the incentive to do due diligence.”

In many cases, the feeder funds that worked with Madoff also did so with few conditions, such as ones requiring that minimum returns be reached before fees would be paid, according to people familiar with the matter. In some cases, the private wealth arms of banks that channelled money to such feeder funds also received payments from these funds. Madoff did not charge his investors fees, but was paid through commissions on his trades, all of which went through the broker-dealer he controlled. Because he did not charge typical fund performance fees, he earned a reputation among some investors for being a lower-cost manager. Tremont Group Holdings, which recently gave more than $3b to Madoff through several channels, received an average 1.25% management fee, which amounted to at least tens of millions of dollars every year, said people familiar with the matter. Most of that money had minimal requirements such as a hurdle rate on performance, though. Most of the Tremont money was handled through a subsidiary separate from its fund of hedge funds. Only 7% of Tremont’s fund of funds was invested with Madoff, said people familiar with the matter.

fireworks at the u.n.

UN official: Israeli delegation spreading ‘malicious lies’
Shlomo Shamir, Haaretz, Dec 16 2008

UN General Assembly President Miguel d’Escoto Brockmann on Tuesday charged that the Israeli delegation has spread a “malicious lie” by asserting that he tried to bar its envoy from addressing a human rights session. The accusations deepen an already existing rift with Israel. D’Escoto, who has chaired the General Assembly since September, also charged that he had received death threats following the assertion. In a special statement read by his spokesman Enrique Yeves, d’Escoto denounced as a “criminal act of slander” the charge, reported in Israeli media, that he had tried to keep Israeli Ambassador Gabriela Shalev from speaking at an assembly session marking the 60th anniversary of the Universal Declaration of Human Rights. According to d’Escoto, following the charges that he said were spread by senior officials in the Israeli delegation, “very serious threats have appeared on the internet” against his life. Yeves said of reported remarks by Shalev, quoted last week in the JPost, accusing d’Escoto of trying to block her participation in the commemorative meeting:

This is a malicious and absolute lie, that could best be characterized as slander, and in any court of law this is a criminal act. This matter is being looked into by the pertinent authorities. Also the security staff at the UN is taking it very seriously.

Yeves said D’Escoto was already taking unspecified “extra security measures” for protection. It was not immediately clear who was behind the reported threats. In response to d’Escoto’s remarks, Israeli UN delegation spokeswoman Mirit Cohen issued a heated press release. Cohen said in the statement:

The president of the Assembly must act as a unifying force, fostering the common values and interests of all member states. Despite this, since entering his position, Mr. d’Escoto has exploited his post, voicing unacceptable declarations, which have prompted criticism from much of the international community. Following the outrageous and ridiculous declaration issued by the Assembly president, Israeli Ambassador Gabriela Shalev cancelled the meeting with him which he had initiated.

D’Escoto also criticized Israel for barring entry to UN envoy Richard Falk, and expelling him early on Monday. D’Escoto’s complaint over the Falk expulsion was echoed by UN Secretary-General, Ban Ki-Moon.

me and my big mouth

My comment to
Al Zaidi in Prison
Roads to Iraq

This got picked up by Firedoglake, a rather influential left-dem US blog. The talkbacks there are a bit more … um … civil.

But anyway, apart from the dubious writing ability of the torture deniers above, one would have thought that more people would have noticed that before the broadcast tape even stopped rolling, at least one of the security guards had stamped hard on Muntader al Zaidi’s right hand, which was being held flat on the ground by another one, thus breaking all or most of the bones in it. That is why he was screaming as he was dragged out. I don’t know where the blood also reported in the room came from, but the obvious guess would be that another one or two guards were kicking him in the head, which would of course have brought about immediate bleeding from the nose and mouth. This is all apparent from the tape, if you use your eyes and ears.

Dec 16th, 2008

rough video (via Raed Jarrar)

bilderbergers everywhere

Change? Obama Inner Circle Filled With Bilderbergers
Victor Thorn, American Free Press, Dec 22 2008 (extracts)

TIMOTHY GEITHNER, TREASURY SECRETARY : Bilderberg, CFR, Trilateral Commission, president and CEO of Federal Reserve Bank of New York, director of policy development for IMF, G30 member, employed at Kissinger & Associates, architect of the recent 2008 financial bailouts, mentored by Lawrence Summers and Robert Rubin. PAUL VOLCKER, ECONOMIC RECOVERY ADVISORY BOARD : Bilderberg, CFR, North American chairman of Trilateral Commission, Federal Reserve chairman during Carter and Reagan administrations, president of Federal Reserve Bank of New York, G30 member, chairman Rothschild Wolfensohn Company, key figure in the collapse of the gold standard during the Nixon administration, longtime associate of the Rockefeller family. LAWRENCE SUMMERS, NATIONAL ECONOMIC COUNCIL : Bilderberg, CFR, Trilateral Commission, treasury secretary during Clinton administration, chief economist at World Bank, former president of Harvard University, Brookings Institute board member, huge proponent of globalization while working for the IMF, protégé of David Rockefeller, mentored by Robert Rubin. HILLARY CLINTON, SECRETARY OF STATE : Bilderberg, CFR, Trilateral Commission, senior partner at the Rose Law Firm. JOSEPH BIDEN, VICE PRESIDENT : Bilderberg, CFR, US Senator since 1972, member of the Senate Judiciary Committee, current chairman of the US Senate Committee on Foreign Relations. BILL RICHARDSON, COMMERCE SECRETARY : Bilderberg, CFR, former congressman, chairman of the DNC in 2004, employee of Kissinger Associates, UN ambassador, governor of New Mexico, energy secretary. ROBERT GATES, DEFENSE SECRETARY : Bilderberg, CFR, former CIA Director, defense secretary under President Bush, co-chaired CFR task force with Zbigniew Brzezinski. TOM DASCHLE, HEALTH SECRETARY : Bilderberg, CFR, former Senate majority leader, Citibank employee, mentored by Robert Rubin. JANET NAPOLITANO, HOMELAND SECURITY DIRECTOR : CFR, Arizona governor, US attorney during the Clinton administration. GEN. JAMES L. JONES, NATIONAL SECURITY ADVISOR : Bilderberg, Trilateral Commission, SACEUR, special envoy for Mid-East Security during Bush administration, board of directors for Chevron and Boeing, NATO commander, member of Brent Scowcroft’s Institute for International Affairs along with Zbigniew Brzezinski, Bobby Ray Inman, Henry Kissinger and John Deutch. SUSAN RICE, U.N. AMBASSADOR : CFR, Rhodes scholar, campaign foreign policy advisor to presidential candidates John Kerry and Michael Dukakis, member of Bill Clinton’s National Security Council and assistant secretary of state for Africa, member of the Brookings Institute (funded by the Ford Foundation and the Rockefellers), and member of the Aspen Strategy Group (teeming with Bilderberg insiders such as Richard Armitage, Brent Scowcroft, and Madeleine Albright)

ross, indyk, pay-to-play

Will Obama End Pay-to-Play in Mideast Policy?
Grant F. Smith, AntiWar.com, Dec 16 2008 (extracts)

Is pay-to-play going to be the modus operandi for Obama’s ME policy appointments? Two former Clinton administration officials, Dennis Ross and Martin Indyk, may provide the answer. They have recently been energized by Hillary Clinton’s nomination as secretary of state, and both are attempting to stage a comeback. Absent any record of accomplishment, policy or electoral, Ross and Indyk have always counted on a presidential nod for influence. Bill Clinton and the DNC squeezed more cash out of the Israel lobby for highly sensitive appointments than Blagojevich would have ever dreamed possible. Clinton received the highest bid from Israeli-American media entrepreneur and AIPAC super-donor Haim Saban. Saban played a decisive role in shaping Clinton policy, through his largesse to AIPAC and the Democratic Party and his subsidization of a stable of appointees-in-waiting. Saban hosted a $3.5m fundraiser for Democrats during Bill Clinton’s presidential campaign against George H.W. Bush. Saban was so anxious to maintain his lead donor influence with the Democratic Party that when he learned another donor had topped his contributions by $250,000, he immediately sent the DNC a $1 bill clipped to a $250,000 check.

Saban served on President Clinton’s Expert Council advising the White House. But Saban really made his mark pulling strings for former AIPAC lobbyist Martin Indyk’s installation as US ambassador to Israel in 1995. This was no easy feat. As a foreign national, Indyk first had to receive rush preferential naturalization to become a citizen eligible to serve as a US ambassador. Indyk’s overshadowing accomplishment while in Israel was having his security clearances revoked for mishandling classified information. Indyk’s lack of achievements for the American people were exceeded only by Clinton appointee Dennis Ross’ failures as ME envoy during critical peace negotiations. After leaving the Clinton administration, Ross retired to a think-tank founded by AIPAC board members. Indyk found a newer and even more influential niche to call home. In 2002 Haim Saban pledged $13m to carve the new Saban Center for Middle East Policy out of the staid old Brookings Institution. Martin Indyk became its director. In 2003 Brookings was the single most cited think-tank in the American news media. The Saban Center played a vital public relations role by creating the illusion of full spectrum political support for the US invasion of Iraq. Brookings’ exhortations for war, immortalized by Martin Indyk’s essay “Lock and Load,” assured Americans that Saddam Hussein probably possessed weapons of mass destruction but that in any case Iraq could only be neutralized by US military force – if the US moved quickly enough.

Anxiety again overcame Haim Saban when he offered two superdelegates at the Young Democrats of America a $1m contribution to their nonprofit in return for throwing their support to Hillary Clinton. Four independent witnesses claimed this crude pay-to-play gambit occurred right before the North Carolina and Indiana primaries, though Saban denied it and no criminal charges were ever filed, demonstrating the Israel lobby’s prosecutorial immunity, which was institutionalized in secret by the US Justice Department during the 1960s. From this perspective, Saban’s move can be seen along a much larger continuum of efforts to secure sensitive ME policy posts in order to steer US policy toward Israeli objectives. Though many appear to violate the law, few are ever even investigated. Obama doesn’t appear to owe Saban or AIPAC’s team any political debts for past services rendered. Like Rahm Emanuel and to some extent Hillary Clinton, they are but opportunistic latecomers to Obama’s movement. A Ross and Indyk comeback could begin to weigh on Obama’s most valued personal commodities, credibility and integrity, and not just the already long-tarnished ME political appointee process. The stakes could not be higher. Ross has already issued an error-laden, blustering manifesto that is little more than a roadmap for US military strikes on Iran. Will we see Dennis Ross and Martin Indyk join other AIPAC veterans streaming into sensitive posts?

bloomberg bailout table

don’t worry, be happy

Fed sets stage for Weimar-style Hyperinflation (extracts)
F William Engdahl, Global Research, Dec 15 2008

Unprecedented Federal Reserve expansion of the monetary base in recent weeks sets the stage for a future Weimar-style hyper-inflation, perhaps before 2010. The Bernanke Fed in recent weeks has stepped in to take a role that was the original purpose of the Treasury’s $700b Troubled Asset Relief Program (TARP). The difference between a Fed bailout of troubled financial institutions and a Treasury bailout is that central bank loans do not have the oversight safeguards that Congress imposed upon the TARP. The total of such emergency Fed lending exceeded $2000b on Nov 6. It had risen by an astonishing 138%, or $1230b, in the 12 weeks since Sep 14, when central bank governors relaxed collateral standards to accept securities that weren’t rated AAA. They did so knowing that on the following day a dramatic shock to the financial system would occur because they, in concert with the Bush Administration, had decided to let it occur. On Sep 15 Bernanke, New York Federal Reserve President, Tim Geithner, the new Obama Treasury Secretary-designate, along with the Bush Administration, agreed to let the fourth largest investment bank, Lehman Brothers, go bankrupt, defaulting on untold billions worth of derivatives and other obligations held by investors around the world. That event, as is now widely accepted, triggered a global systemic financial panic as it was no longer clear to anyone what standards the US Government was using to decide which institutions were ‘too big to fail’ and which not. Since then the US Treasury Secretary has reversed his policies on bank bailouts repeatedly, leading many to believe Henry Paulson and the Washington Administration, along with the Fed, have lost control.

In response to the deepening crisis, the Bernanke Fed has decided to expand what is technically called the monetary base, defined as total bank reserves plus cash in circulation, the basis for potential bank lending into the economy. Since the Lehman Bros. default, this money expansion had risen dramatically by the end of October, at a year-on-year rate of growth of 38%, a rate without precedent in the 95-year history of the Fed since its creation in 1913. The previous highest growth rate, according to Fed data, was 28%, in September 1939, as the US was building up industry for the evolving war in Europe. By the first week of December, that expansion of the monetary base had jumped to a staggering 76% rate in just 3 months. It has gone from $836b in Dec 2007 when the crisis appeared contained, to $1,479b in Dec 2008, an explosion of 76% year-on-year. Moreover, until Sep 2008, the month of the Lehman Brothers collapse, the Fed had held the expansion of the monetary base virtually flat. The 76% expansion has almost entirely taken place within the past three months, which implies an annualized expansion rate of more than 300%. In early December the Congress oversight agency, GAO, issued its first mandated review of the lending of the US Treasury’s $700b TARP program. The review noted that in 30 days since the program began, Henry Paulson’s office had handed out $150b of taxpayer money to financial institutions with no effective accountability of how the money is being used.

Further adding to the troubles in the world’s former financial Mecca, the US Congress, acting on largely ideological grounds, shocked the financial system when it refused to give even a meager $14b emergency loan to the Big Three automakers, General Motors, Chrysler and Ford. While it is likely that the Treasury will extend emergency credit to the companies until Jan 20 or until the newly elected Congress can consider a new plan, the prospect of a chain-reaction bankruptcy collapse of the three giant companies is very near. What is being left out of the debate is that those three companies account for a combined 25% of all US corporate bonds outstanding. They are held by private pension funds, mutual funds, banks and others. If the auto parts suppliers of the Big Three are included, an estimated $1000b of corporate bonds are now at risk of chain-reaction default. Once banks begin finally to lend again, perhaps in a year or so, that will flood the US economy with liquidity in the midst of a deflationary depression. At that point or perhaps well before, the dollar will collapse, as foreign holders of US Treasury bonds and other assets run. That will not be pleasant, as the result would be a sharp appreciation in the Euro and a crippling effect on exports in Germany and elsewhere should the nations of the EU and other non-dollar countries such as Russia, OPEC members, and above all China not have arranged a new zone of stabilization apart from the dollar.

For the week ended Dec 6 initial jobless claims rose to the highest level since Nov 1982. More than 4m workers remained on unemployment, also the most since 1982, and in November US companies cut jobs at the fastest rate in 34 years. Some 1.9m US jobs have vanished so far in 2008. By some estimates it will take another five to seven years to see US home prices reach bottom. In 2009, as interest rate resets on some $1000b worth of Alt-A US home mortgages begin to kick in, the rate of home abandonments and foreclosures will explode. Little, if any, of the so-called mortgage amelioration programs offered to date reach the vast majority affected. That process in turn will accelerate as millions of Americans lose their jobs in the coming months.

remember ben-ami kadish?

Kadish appeared in court before Judge Douglas F. Eaton in Manhattan on Apr 22 2008. He was released on the same day after putting up a $300,000 bail bond. Kadish also had to turn in his passport, because there was considerable risk that he would flee to Israel, but he was allowed to return home. He was supposed to reappear at the US District Court for the Southern District of New York in Manhattan on May 22, which is where the tale more or less ends. Kadish did not go to court on that day, and his whereabouts and prospects are unknown. The US District Court has a Web site with a search feature that enables one to look for active or past court cases. Typing in “Kadish” produces no results, as if the case were erased. Calling the court to attempt to find out the status of the Kadish trial is also a dead end. Direct telephone inquiries resulted in a complete stonewall. Promises to call back with information on the case were made by court officials, but no one ever did so. Calls to the Department of Justice about Kadish were likewise not returned. It is as if Kadish has vanished. – Phil Giraldi, AntiWar.com

some settler statistics

‘Settler population doubled in 12 years’
Tovah Lazaroff, JPost, Dec 15 2008

The settler population in the West Bank is growing three times as fast as the population in the rest of the country and has doubled over the past 12 years, according to an extensive demographic study published Monday by the Ariel University Center in Samaria (the College of Judea and Samaria). Settlement residents tend to be healthier, have a higher income and are more likely to be employed than other Israelis, and their children are more likely to do well on the matriculation exams than their counterparts who live within the Green Line, according to the 240-page study. The report is filled with statistical tables to support its conclusions, many of them based on data from the Central Bureau of Statistics. On the demographic front, the study states that in the last 12 years the settler population has grown by 107%, from 130,000 people in 1995 to 270,000 people in 2007, compared with 29% growth in the rest of the country. In the last three years, from 2005 to 2007, the growth has been three times as high as elsewhere, 5% a year compared to 1.7%. Most of the population increase is the result of new babies born to residents. In 2007, of the 14,500 new residents of Judea and Samaria, 9,000 were newborns. Of the remaining 5,500 new residents, 800 are new immigrants and 4,700 are Israelis who moved from within the Green Line. The settler birth rate is higher than within the Green Line, with 35 children born to every 1,000 people as opposed to 20. Overall the settler population is younger than elsewhere. The average age is 20, compared to 28 outside of Judea and Samaria. Residents who are 65 and over make up only 2.9% of the population compared with 10% elsewhere.

Most of the settlers are native Israelis, 82.6%, compared with 69.5% in the rest of the country. In 2006, 3.9% of new immigrants went to live in Judea and Samaria, of whom 38.8% were from the United States, 25.8% were from the former Soviet Union while 19.7% came from France or England. According to 2006 data, the settlement with the highest number of immigrants was Ariel, where 42.2% of the population are immigrants who came to Israel after 1990. In Maaleh Ephraim 24.7% of the residents are immigrants, in Kiryat Arba, 17.9%, in Efrat, 15.5% and in Maaleh Adumim, 15.1%. Haredim, who have been populating fast-growing West Bank cities like Betar Illit and Modi’in Illit, make up 30.7% of the settler population, compared with 7.5 % of the population within the Green Line. Settlers are more likely to work. Some 62% of the population participates in the work force compared with 56% elsewhere. Similarly, unemployment is lower – 6.5% in Judea and Samaria compared with 7.3% in the rest of the country. Some 71.2% of settler teens who take the matriculation exams earn a matriculation certificate, compared to 65.8% in the rest of the country. Settlers make more money, NIS13,566 on average per family in 2006, compared with NIS12,343 in the rest of the country. Per capita income, however, is 13% less than elsewhere because settler families are larger. Settlers were more likely to describe themselves as healthy, 91% compared with 73% within the Green Line, and to state that they were satisfied with their lives – 92.3% compared to 83% in the rest of the country. On the negative side, there are proportionately 22% more criminal files in Judea and Samaria than in Israel proper.