CORRUPTION UPDATES 143
Posted: January 7, 2008, Draft edition
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1) The Articles linked below were Abstracted from the sources cited. After the abstract there's analysis and commentary, links to related articles, and a link to the database with suggested search terms.
3 Kenya articles:
Kenyan City Is Gripped by Violence
By JEFFREY GETTLEMAN
NYT, 1-6-08
http://www.nytimes.com/2008/01/06/world/africa/06kenya.html?_r=1
&oref=slogin&ref=todayspaper&pagewanted=print
KISUMU, Kenya — Oginga Odinga Street, the main thoroughfare in town, is a testament to rage.
Dozens of stores have been looted, torched and smashed by rioters and then picked clean by an army of glue-sniffing street children searching for whatever was left. The scorched Ukwala supermarket looks as if a bomb blew up inside it. The gates of Zamana Electronic are mangled.
People here say this is just the beginning.
“We will never surrender!” yelled a man who attended a rally for opposition leaders on Saturday.
“We want guns, guns!” another man added.
While much of Kenya is trying to get back to normal after a week of post-election violence that has claimed more than 300 lives nationwide, Kisumu, Kenya’s third-largest city, is still quivering with anger. Few places have been so thoroughly gutted by the turbulence as here.
With Kenya’s leaders still at an impasse despite the efforts of Jendayi E. Frazer, the American assistant secretary of state for Africa who met with both sides on Saturday, it looks as if the tensions will linger dangerously for some time.
Kisumu is the stronghold of Raila Odinga, the opposition leader who said he had been cheated out of the presidency, and the town’s main street is named after his father, a local hero.
The people here followed the election so closely that they remember the precise hour last weekend, on Saturday, when the vote count suddenly changed, and Mwai Kibaki, Kenya’s president, went from trailing badly to winning with a suspiciously thin margin of victory.
The town exploded, and a furious mob stormed up Oginga Odinga street. The biggest businesses are now in ashes. Fuel, food and cellphone credit are in short supply. And around 2,000 people from Mr. Kibaki’s tribe, the Kikuyu, are camped out at the police station, trying to escape a wave of revenge killings.
“If I stay here, I’ll be lynched,” said Waweru Mburu, a Kikuyu, as he nervously waited outside a supermarket, one of the two open in this town of half a million people. His wife had been waiting for hours, trying to buy milk.
Trucks carrying Kikuyu and evacuees from another tribe, the Kisii, many of whom supported Mr. Kibaki, are jeered at as they pull out of town. Those doing the jeering are mostly Luo, like Mr. Odinga, who live here in great numbers.
“Traitors!” some Luo shouted on Saturday as a truck passed.
People on both sides said the tensions would not ease as long as Kenya’s political leaders refused to even speak to each other, which has been the situation since the election on Dec. 27.
On Saturday, Mr. Kibaki indicated that he was ready to form “a government of national unity.” Mr. Odinga did not reject that outright but said he would not entertain any offers until the two sides sat down in the presence of foreign mediators.
Kenya's Kibaki: 'let's form unity government'
By Sebastien Berger in Nairobi and Emma Henry
Last Updated: 8:06pm GMT 05/01/2008
Kenya's president Mwai Kibaki has offered an olive branch to the opposition that accuses him of stealing last week's presidential election.
Other Telegraph (UK) articles:
Leader: Re-run Kenya's presidential election
Kenya's desperation was obvious but ignored
In pictures: Violent clashes in Kenya
More than 300 people have been killed in largely ethnic clashes following the vote, and hundreds of thousands have fled their homes, in the normally peaceful country.
Nairobi riots: Cameraman films machete attack as tribes clash
In a meeting with the top US diplomat for Africa, Jendayi Frazer, Mr Kibaki said he was willing to make a deal.
So far the two sides have refused to meet, with the opposition insisting on international mediation and Mr Kibaki saying it was unnecessary.
"The president said he was ready to form a government of national unity, that would not only unite Kenyans but would also help in the healing and reconciliation process," said a statement from State House.
But no details of the offer were available, and it is likely that Mr Kibaki would insist on retaining the presidency in any agreement.
By contrast the opposition is demanding Mr Kibaki, whom it calls an illegal president, step down and an interim government be put in place before a re-run of the election in three months time.
Raila Odinga, the opposition leader who believes he was leading the presidential vote until Mr Kibaki was declared the victor and sworn in, said: "We know the way governments of national unity operate. That's a way to cheat Kenyans of their rights."
President George W. Bush sent Miss Frazer to Nairobi on Friday to try to help end a week of killings and chaos since the election.
The turbulence has taken an ethnic twist, with other tribes pitted against President Kibaki's Kikuyu people, and brought chaos to the country.
The new moves come as the UN World Food Programme warned that it was struggling to bring food to 100,000 displaced people in the Rift Valley area. The agency said security issues had slowed its trucks.
Mr Odinga wants the president to go, allowing the creation of an unspecified 'transitional arrangement' - not a formal coalition government - pending a re-run of the election within three months.
But yesterday, mass demonstrations he promised failed to materialise for the second day running.
Alfred Mutua, the president's spokesman, said the government would re-run the poll, but only if ordered to by the courts. The opposition have little faith in Kenya's compromised judiciary.
After meeting the president, Desmond Tutu, the retired Archbishop of Cape Town, said that Mr Kibaki was "not averse" to the idea of a coalition government. Yet the president himself has not signalled any willingness to include his opponents in a unity government.
The ODM has won at least 101 of Parliament's 222 seats. But the party lacks the crucial two-thirds majority needed to force another election by passing a motion of no confidence in Mr Kibaki.
Across Kenya, there were no further reports of tribal violence. But the country is still volatile and observers do not write-off the opposition.
Anders Sjogren, a Nairobi-based political scientist, said that Mr Kibaki was "definitely not in charge" of the situation.
Kenyan Police Accused of Killings, Arson
By KATHARINE HOURELD, Associated Press Writer
3:13 PM PST, January 6, 2008
NAIROBI, Kenya -- Noor Adam begged police to spare his children as he lay bleeding from a bullet wound in front of his shop but they set fire to his store anyway, burning to death his 7-year-old daughter and teenage son inside.
The Nairobi shopkeeper says he was targeted by police from a rival tribe -- underscoring how riots that began as opposition protests have sent simmering ethnic tensions boiling over and how some police appear to have fueled rather than tamped the violence.
More than two dozen Kenyan civil organizations say police have taken to using extraordinary force, and in some cases carried out extrajudicial executions, in the face of riots sparked by anger over alleged election fraud. Police deny the accusations.
The unrest began when supporters of opposition leader Raila Odinga accused President Mwai Kibaki of rigging the Dec. 27 vote but soon exploded into widespread ethnic clashes, pulling in many more than Kibaki's Kikuyu tribe and Odinga's Luo, and leaving more than 300 people dead.
Adam, a member of the Luhya tribe who have largely backed opposition leader Odinga, said he was sleeping in his shop with his daughter Saida and his 17-year-old son, Rashid, when the police from a different tribe arrived on Dec. 29.
"When I showed my ID, they said, 'He's from the Luhya community ... Shoot him,'" Adam said.
The police shot him in the leg, then turned their attention to his shop.
"I saw the police set the shop on fire. I told them I had children inside," said Adam who was being treated Saturday for an infected bullet wound at the Makina clinic in Nairobi's Kibera slum.
Alex Wierbinski, Berkeley, Ca., January 2, 2008
This only happened because we supported Kibaki before the election, and have tried to prop up his robbery until the country went nuts.
We most likely pursued this corrupt course in return for Kibaki’s illegal detention of Somalias fleeing the us backed Ethiopian invasion of Somali.
Thailand is in the same boat: their military coup has been protected by the American government and media, in return for providing a secret prison where we could torture our kidnap victims.
Look around. Our dictatorship in Pakistan has brought chaos to eastern afganastan and western pakistan, and framed the us as yet another empire interefering in their domestic affairs.
Rather than suppressing "terror," we are encouraging people who seek freedom around the world to blow up our dictators.
Egypt's people are in the same boat, suffering under a military dictatorship propped up by american guns, political support, and boatloads of money.
Keynan Election Fraud covered by US, xinhuanet.com
Kenyan Election Condemned, telegraph, 12-31-07
Violence Grips Kenya, Sky, 12-31-07
Kenya election fraud rejected, economist, 1-2-03
Kenyan election chair announced result before finishing count, guardian, 1-3-08
Kenya's Att General calls for independent count, guardian, 1-4-08
recent past:
BUSH LAWLESSNESS SPREADS TO KENYA: Kenya defends transfers, absolves U.S., McClatchy, 3-15-07
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2) The Article linked below was Abstracted from the source cited.
Robert Fisk: They don't blame al-Qa'ida. They blame Musharraf
The Independent, UK, 29 December 2007
Fisk: recent articles
http://news.independent.co.uk/fisk/article3291600.ece
Weird, isn't it, how swiftly the narrative is laid down for us. Benazir Bhutto, the courageous leader of the Pakistan People's Party, is assassinated in Rawalpindi – attached to the very capital of Islamabad wherein ex-General Pervez Musharraf lives – and we are told by George Bush that her murderers were "extremists" and "terrorists". Well, you can't dispute that.
Of course, given the childish coverage of this appalling tragedy – and however corrupt Ms Bhutto may have been, let us be under no illusions that this brave lady is indeed a true martyr – it's not surprising that the "good-versus-evil" donkey can be trotted out to explain the carnage in Rawalpindi.
Only a few days ago – in one of the most remarkable (but typically unrecognised) scoops of the year – Tariq Ali published a brilliant dissection of Pakistan (and Bhutto) corruption in the London Review of Books, focusing on Benazir and headlined: "Daughter of the West". In fact, the article was on my desk to photocopy as its subject was being murdered in Rawalpindi.
Towards the end of this report, Tariq Ali dwelt at length on the subsequent murder of Murtaza Bhutto by police close to his home at a time when Benazir was prime minister – and at a time when Benazir was enraged at Murtaza for demanding a return to PPP values and for condemning Benazir's appointment of her own husband as minister for industry, a highly lucrative post.
When Murtaza's 14-year-old daughter, Fatima, rang her aunt Benazir to ask why witnesses were being arrested – rather than her father's killers – she says Benazir told her: "Look, you're very young. You don't understand things." Or so Tariq Ali's exposé would have us believe. Over all this, however, looms the shocking power of Pakistan's ISI, the Inter Services Intelligence.
This vast institution – corrupt, venal and brutal – works for Musharraf.
So, of course, we were asked to concentrate once more on all those " extremists" and "terrorists", not on the logic of questioning which many Pakistanis were feeling their way through in the aftermath of Benazir's assassination.
It doesn't, after all, take much to comprehend that the hated elections looming over Musharraf would probably be postponed indefinitely if his principal political opponent happened to be liquidated before polling day.
So let's run through this logic in the way that Inspector Ian Blair might have done in his policeman's notebook before he became the top cop in London.
Question: Who forced Benazir Bhutto to stay in London and tried to prevent her return to Pakistan? Answer: General Musharraf.
Question: Who ordered the arrest of thousands of Benazir's supporters this month? Answer: General Musharraf.
Question: Who placed Benazir under temporary house arrest this month? Answer: General Musharraf.
Question: Who declared martial law this month? Answer General Musharraf.
Question: who killed Benazir Bhutto?
Er. Yes. Well quite.
You see the problem? Yesterday, our television warriors informed us the PPP members shouting that Musharraf was a "murderer" were complaining he had not provided sufficient security for Benazir. Wrong. They were shouting this because they believe he killed her.
Daughter of the West, London Review of Books, 12-13-07
Bhutto Patriarch rejects husband-son, mcclatchy, 1-1-08
Billery Supports Musharraf Dictatorship, Dawn, 12-31-07
Husband to Lead Bhutto Party, Dawn, 12-30-07
Husband to Lead Bhutto Party, bbc, 12-30-07
Bhutto Killed: Articles
Bhutto Crisis Updates:
Video of Bhutto's last Moments, Explosion, guardian, 12-28-07
Pakistan was rolling to crisis since musharraf took over: Links
2b) The Article linked below was Abstracted from the source cited.
Daughter of the West
Tariq Ali
London Review of Books, 12-13-07
http://www.lrb.co.uk/v29/n24/ali_01_.html
Arranged marriages can be a messy business. Designed principally as a means of accumulating wealth, circumventing undesirable flirtations or transcending clandestine love affairs, they often don’t work. Where both parties are known to loathe each other, only a rash parent, desensitised by the thought of short-term gain, will continue with the process knowing full well that it will end in misery and possibly violence. That this is equally true in political life became clear in the recent attempt by Washington to tie Benazir Bhutto to Pervez Musharraf.
The single, strong parent in this case was a desperate State Department – with John Negroponte as the ghoulish go-between and Gordon Brown as the blushing bridesmaid – fearful that if it did not push this through both parties might soon be too old for recycling. The bride was certainly in a hurry, the groom less so.
Both parties made concessions. She agreed that he could take off his uniform after his ‘re-election’ by Parliament, but it had to be before the next general election. (He has now done this, leaving himself dependent on the goodwill of his successor as army chief of staff.) He pushed through a legal ruling – yet another sordid first in the country’s history – known as the National Reconciliation Ordinance, which withdrew all cases of corruption pending against politicians accused of looting the national treasury. The ruling was crucial for her since she hoped that the money-laundering and corruption cases pending in three European courts – in Valencia, Geneva and London – would now be dismissed. This doesn’t seem to have happened.
The ‘breakthrough’ was loudly trumpeted in the West, however, and a whitewashed Benazir Bhutto was presented on US networks and BBC TV news as the champion of Pakistani democracy – reporters loyally referred to her as ‘the former prime minister’ rather than the fugitive politician facing corruption charges in several countries.
She had returned the favour in advance by expressing sympathy for the US wars in Iraq and Afghanistan, lunching with the Israeli ambassador to the UN (a litmus test) and pledging to ‘wipe out terrorism’ in her own country. In 1979 a previous military dictator had bumped off her father with Washington’s approval, and perhaps she thought it would be safer to seek permanent shelter underneath the imperial umbrella.
As for the general, he had begun his period in office in 1999 by bowing to the spirit of the age and titling himself ‘chief executive’ rather than ‘chief martial law administrator’, which had been the norm. Like his predecessors, he promised he would stay in power only for a limited period, pledging in 2003 to resign as army chief of staff in 2004. Like his predecessors, he ignored his pledge. Martial law always begins with the promise of a new order that will sweep away the filth and corruption that marked the old one: in this case it toppled the civilian administrations of Benazir Bhutto and Nawaz Sharif.
Dreaming of her glory days in the last century, Benazir wanted a large reception on her return. The general was unhappy. The intelligence agencies (as well as her own security advisers) warned her of the dangers. She had declared war on the terrorists and they had threatened to kill her. But she was adamant.
The plan had been to move slowly in the Bhuttomobile from Karachi airport to the tomb of the country’s founder, Muhammad Ali Jinnah, where she would make a speech. It was not to be. As darkness fell, the bombers struck. Who they were and who sent them remains a mystery. She was unhurt, but 130 people died, including some of the policemen guarding her. The wedding reception had led to mayhem.
The general, while promising to collaborate with Benazir, was coolly making arrangements to prolong his own stay at President’s House. Even before her arrival he had considered taking drastic action to dodge the obstacles that stood in his way, but his generals (and the US Embassy) seemed unconvinced. The bombing of Benazir’s cavalcade reopened the debate. Pakistan, if not exactly the erupting volcano portrayed in the Western media, was being shaken by all sorts of explosions. The legal profession, up in arms at Musharraf’s recent dismissal of the chief justice, had won a temporary victory, resulting in a fiercely independent Supreme Court. The independent TV networks continued to broadcast reports that challenged official propaganda. Investigative journalism is never popular with governments and the general often contrasted the deference with which he was treated by the US networks and BBC television with the ‘unruly’ questioning inflicted on him by local journalists: it ‘misled the people’. He had become obsessed with the media coverage of the lawyers’ revolt. A decline in his popularity increased the paranoia. His advisers were people he had promoted. Generals who had expressed divergent opinions in ‘frank and informal get-togethers’ had been retired. His political allies were worried that their opportunities to enrich themselves even further would be curtailed if they had to share power with Benazir.
Only firm action could ‘restore order’ – i.e. save his skin. The usual treatment in these cases is a declaration of martial law. But what if the country is already being governed by the army chief of staff? The solution is simple. Treble the dose. Organise a coup within a coup. That is what Musharraf decided to do. Washington was informed a few weeks in advance, Downing Street somewhat later. Benazir’s patrons in the West told her what was about to happen and she, foolishly for a political leader who has just returned to her country, evacuated to Dubai.
On 3 November Musharraf, as chief of the army, suspended the 1973 constitution and imposed a state of emergency: all non-government TV channels were taken off the air, the mobile phone networks were jammed, paramilitary units surrounded the Supreme Court. The chief justice convened an emergency bench of judges, who – heroically – declared the new dispensation ‘illegal and unconstitutional’. They were unceremoniously removed and put under house arrest. Pakistan’s judges have usually been acquiescent. Those who in the past resisted military leaders were soon bullied out of it, so the decision of this chief justice took the country by surprise and won him great admiration.
Lawyers were arrested all over the country; many were physically attacked by policemen. Humiliate them was the order, and the police obliged. A lawyer, ‘Omar’, circulated an account of what happened:
While I was standing talking to my colleagues, we saw the police go wild on the orders of a superior officer. In riot gear . . . brandishing weapons and sticks, about a hundred policemen attacked us . . . and seemed intensely happy at doing so. We all ran.
Some of us who were not as nimble on their feet as others were caught by the police and beaten mercilessly. We were then locked in police vans used to transport convicted prisoners. Everyone was stunned at this show of brute force but it did not end. The police went on mayhem inside the court premises and court buildings . . . Those of us who were arrested were taken to various police stations and put in lockups. At midnight, we were told that we were being shifted to jail. We could not get bail as our fundamental rights were suspended.
Agitated phone calls from Pakistan persuaded her to return to Karachi. To put her in her place, the authorities kept her plane waiting on the tarmac. When she finally reached the VIP lounge, her PPP colleagues told her that unless she denounced the emergency there would be a split in the party. Outsmarted and abandoned by Musharraf, she couldn’t take the risk of losing key figures in her party. She denounced the emergency and its perpetrator, established contact with the beleaguered opposition, and, as if putting on a new lipstick, declared that she would lead the struggle to get rid of the dictator.
Any notion of political morality had long ago been dumped. The very idea of a party with a consistent set of beliefs was regarded as ridiculous and outdated.
The go-between from Washington arrived at very short notice. Negroponte spent some time with Musharraf and spoke to Benazir, still insisting that they make up and go through with the deal. She immediately toned down her criticisms, but the general was scathing and said in public that there was no way she could win the elections scheduled for January. No doubt the ISI are going to rig them in style. Had she remained loyal to him she might have lost public support, but he would have made sure she had a substantial presence in the new parliament. Now everything is up for grabs again. The opinion polls show that her old rival, Nawaz Sharif, is well ahead of her. Musharraf’s hasty pilgrimage to Mecca was probably an attempt to secure Saudi mediation in case he has to cut a deal with the Sharif brothers – who have been living in exile in Saudi Arabia – and sideline her completely. Both sides deny that a deal was done, but Sharif returned to Pakistan with Saudi blessings and an armour-plated Cadillac as a special gift from the king. Little doubt that Riyadh would rather him than Benazir.
With the country still under a state of emergency and the largest media network refusing to sign the oath of allegiance that would allow them back on air, the polls scheduled for January can only be a general’s election. It’s hardly a secret that the ISI and the civilian bureaucracy will decide who wins and where, and some of the opposition parties are, wisely, considering a boycott. Nawaz Sharif told the press that in the course of a long telephone call he had failed to persuade Benazir to join it and thereby render the process null and void from the start.
(ppp history omitted. See full story)
(Omitted: suspicious death of Shahnawaz, Benizar's brother)
By the time she was re-elected in 1993, she had abandoned all idea of reform, but that she was in a hurry to do something became clear when she appointed her husband minister for investment, making him responsible for all investment offers from home and abroad. It is widely alleged that the couple accumulated $1.5 billion. The high command of the Pakistan People’s Party now became a machine for making money, but without any trickle-down mechanism. This period marked the complete degeneration of the party. All that shame-faced party members could say, when I asked, was that ‘everybody does it all over the world,’ thus accepting that the cash nexus was now all that mattered. In foreign policy her legacy was mixed. She refused to sanction an anti-Indian military adventure in Kargil on the Himalayan slopes, but to make up for it, as I wrote in the LRB (15 April 1999), her government backed the Taliban takeover in Kabul – which makes it doubly ironic that Washington and London should be promoting her as a champion of democracy.
Murtaza Bhutto had contested the elections from abroad and won a seat in the Sind provincial legislature. He returned home and expressed his unhappiness with his sister’s agenda. Family gatherings became tense. Murtaza had his weaknesses, but he wasn’t corrupt and he argued in favour of the old party’s radical manifesto. He made no secret of the fact that he regarded Zardari as an interloper whose only interest was money. Nusrat Bhutto suggested that Murtaza be made the chief minister of Sind: Benazir’s response was to remove her mother as chairperson of the PPP. Any sympathy Murtaza may have felt for his sister turned to loathing. He no longer felt obliged to control his tongue and at every possible opportunity lambasted Zardari and the corrupt regime over which his sister presided. It was difficult to fault him on the facts. The incumbent chief minister of Sind was Abdullah Shah, one of Zardari’s creatures. He began to harass Murtaza’s supporters. Murtaza decided to confront the organ-grinder himself. He rang Zardari and invited him round for an informal chat sans bodyguards to try and settle the problems within the family. Zardari agreed. As the two men were pacing the garden, Murtaza’s retainers appeared and grabbed Zardari. Someone brought out a cut-throat razor and some warm water and Murtaza shaved off half of Zardari’s moustache to the delight of the retainers, then told him to get lost.
Some months later, in September 1996, as Murtaza and his entourage were returning home from a political meeting, they were ambushed, just outside their house, by some seventy armed policemen accompanied by four senior officers. A number of snipers were positioned in surrounding trees. The street lights had been switched off. Murtaza clearly understood what was happening and got out of his car with his hands raised; his bodyguards were instructed not to open fire. The police opened fire instead and seven men were killed, Murtaza among them. The fatal bullet had been fired at close range. The trap had been carefully laid, but as is the way in Pakistan, the crudeness of the operation – false entries in police logbooks, lost evidence, witnesses arrested and intimidated, the provincial PPP governor (regarded as untrustworthy) dispatched to a non-event in Egypt, a policeman killed who they feared might talk – made it obvious that the decision to execute the prime minister’s brother had been taken at a very high level.
While the ambush was being prepared, the police had sealed off Murtaza’s house (from which his father had been lifted by Zia’s commandos in 1978). The family inside felt something was wrong. At this point, a remarkably composed Fatima Bhutto, aged 14, decided to ring her aunt at Prime Minister’s House. The conversation that followed remains imprinted on her memory and a few years ago she gave me an account of it. It was Zardari who took her call:
Fatima: I wish to speak to my aunt, please.
Zardari: It’s not possible.
Fatima: Why? [At this point, Fatima says she heard loud wails and what sounded like fake crying.]
Zardari: She’s hysterical, can’t you hear?
Fatima: Why?
Zardari: Don’t you know? Your father’s been shot.
Fatima and Ghinwa found out where Murtaza had been taken and rushed out of the house. There was no sign on the street outside that anything had happened: the scene of the killing had been wiped clean of all evidence. There were no traces of blood and no signs of any disturbance. They drove straight to the hospital but it was too late; Murtaza was already dead. Later they learned that he had been left bleeding on the ground for almost an hour before being taken to a hospital where there were no emergency facilities of any kind.
When Benazir arrived to attend her brother’s funeral in Larkana, angry crowds stoned her limo. She had to retreat. In another unusual display of emotion, local people encouraged Murtaza’s widow to attend the actual burial ceremony in defiance of Islamic tradition. According to Fatima, one of Benazir’s hangers-on instigated legal proceedings against Ghinwa in a religious court for breaching Islamic law. Nothing was sacred.
Anyone who witnessed Murtaza’s murder was arrested; one witness died in prison. When Fatima rang Benazir to ask why witnesses were being arrested and not the killers she was told: ‘Look, you’re very young. You don’t understand things.’ Perhaps it was for this reason that the kind aunt decided to encourage Fatima’s blood-mother, Fauzia, whom she had previously denounced as a murderer in the pay of General Zia, to come to Pakistan and claim custody of Fatima. No mystery as to who paid her fare from California. Fatima and Ghinwa Bhutto resisted and the attempt failed. Benazir then tried a softer approach and insisted that Fatima accompany her to New York, where she was going to address the UN Assembly. Ghinwa Bhutto approached friends in Damascus and had her two children flown out of the country. Fatima later discovered that Fauzia had been seen hobnobbing with Benazir in New York.
A judicial tribunal had been appointed by Benazir’s government to inquire into the circumstances leading to Murtaza’s death. Headed by a Supreme Court judge, it took detailed evidence from all parties. Murtaza’s lawyers accused Zardari, Abdullah Shah and two senior police officials of conspiracy to murder. Benazir (now out of power) accepted that there had been a conspiracy, but suggested that ‘the hidden hand responsible for this was President Farooq Ahmad Leghari’: the intention, she said, was to ‘kill a Bhutto to get rid of a Bhutto’. Nobody took this seriously. Given all that had happened, it was an incredible suggestion.
The tribunal said there was no legally acceptable evidence to link Zardari to the incident, but accepted that ‘this was a case of extra-judicial killings by the police’ and concluded that such an incident could not have taken place without approval from the highest quarters. Nothing happened. Eleven years later, Fatima Bhutto publicly accused Zardari; she also claimed that many of those involved that day appear to have been rewarded for their actions. In an interview on an independent TV station just before the emergency was imposed, Benazir was asked to explain how it happened that her brother had bled to death outside his home while she was prime minister. She walked out of the studio. A sharp op-ed piece by Fatima in the LA Times on 14 November elicited the following response: ‘My niece is angry with me.’ Well, yes.
Musharraf may have withdrawn the corruption charges, but three other cases are proceeding in Switzerland, Spain and Britain. In July 2003, after an investigation lasting several years, Daniel Devaud, a Geneva magistrate, convicted Mr and Mrs Asif Ali Zardari, in absentia, of money laundering. They had accepted $15 million in bribes from two Swiss companies, SGS and Cotecna. The couple were sentenced to six months in prison and ordered to return $11.9 million to the government of Pakistan. ‘I certainly don’t have any doubts about the judgments I handed down,’ Devaud told the BBC.
In Britain the legal shenanigans concern the $3.4 million Rockwood estate in Surrey, bought by offshore companies on behalf of Zardari in 1995 and refurbished to his exacting tastes. Zardari denied owning the estate. Then when the court was about to instruct the liquidators to sell it and return the proceeds to the Pakistan government, Zardari came forward and accepted ownership. Last year, Lord Justice Collins ruled that, while he was not making any ‘findings of fact’, there was a ‘reasonable prospect’ that the Pakistan government might be able to establish that Rockwood had been bought and furnished with ‘the fruits of corruption’.
The state of emergency targeted the judiciary, opposition politicians and the independent media. All three groups were, in different ways, challenging the official line on Afghanistan and the ‘war on terror’, the disappearance of political prisoners and the widespread use of torture in Pakistani prisons. The issues were being debated on television in a much more open fashion than happens anywhere in the West, where a blanket consensus on Afghanistan drowns all dissent. Musharraf argued that civil society was hampering the ‘war on terror’. Hence the emergency. It’s nonsense, of course. It’s the war in the frontier regions that is creating dissent inside the army. Many do not want to fight. Hence the surrender of dozens of soldiers to Taliban guerrillas. This is the reason many junior officers are taking early retirement.
The Pakistan army is half a million strong. Its tentacles are everywhere: land, industry, public utilities and so on. It would require a cataclysmic upheaval (a US invasion and occupation, for example) for this army to feel threatened by a jihadi uprising. Two considerations unite senior officers: the unity of the organisation and keeping politicians at bay. One reason is the fear that they might lose the comforts and privileges they have acquired after decades of rule; but they also have the deep aversion to democracy that is the hallmark of most armies. Unused to accountability within their own ranks, it’s difficult for them to accept it in society at large.
As southern Afghanistan collapses into chaos, and as corruption and massive inflation takes hold, the Taliban is gaining more and more recruits. The generals who convinced Benazir that control of Kabul via the Taliban would give them ‘strategic depth’ may have retired, but their successors know that the Afghans will not tolerate a long-term Western occupation. They hope for the return of a whitewashed Taliban. Instead of encouraging a regional solution that includes India, Iran and Russia, the US would prefer to see the Pakistan army as its permanent cop in Kabul. It won’t work. In Pakistan itself the long night continues as the cycle restarts: military leadership promising reforms degenerates into tyranny, politicians promising social support to the people degenerate into oligarchs. Given that a better functioning neighbour is unlikely to intervene, Pakistan will oscillate between these two forms of rule for the foreseeable future.
Postscript
A triumvirate consisting of her husband, Asif Zardari (one of the most venal and discredited politicians in the country and still facing corruption charges in three European courts), and two ciphers will run the party until Benazir’s 19-year-old son, Bilawal, comes of age. He will then become chairperson-for-life and, no doubt, pass the post on to his children. The fact that this is now official does not make it any less grotesque. The Pakistan People’s Party is being treated as a family heirloom, a property to be disposed of at the will of its leader. Both Pakistan and the People’s Party deserve better than this medieval charade.
Benazir’s last decision was in the same autocratic mode as the ones that went before it; her approach – tragically – cost her her life. Had she heeded the advice of some party leaders and not agreed to the Washington-brokered deal with Pervez Musharraf or, later, decided to boycott his parliamentary election, she might still be alive. Her last gift to the country does not augur well for its future.
Dictator Musharaaf Fired Chief Justice, Shot Protesters in the Streets, Arresting Political Opponents, Closed Media:
written June 7, 2007
US Says, Does, Nothing but Supply Arms and Cash to Musharraf
It is hard to ascertain what side we are on in this so called "War on Terror." Apparently it is not "terror" when our dictators seize total power, and kill the people who resist.
Apparently it is not "terror" when we bombed cities during the "blitzkrieg," I mean during "shock and awe." We continue to bomb residences and civilian buildings anywhere we suspect there are "terrorists," to this day.
Apparently it is not "Terror" when we secretly kidnap, imprison, and torture anyone we believe may be a "Terrorist."
"Terrorism" is a label reserved for the people who will not accept or acknowledge that we, or our friends have defeated them. Apparently, our claims to victory, and moral superiority, are premature.
The Palestinians have been militarily defeated, have had their country partitioned, and have lived under the iron fist of a vastly superior military. And still they will not accept the fact that we won.
Osama is in the same boat. He and his followers will not accept the American-Backed Saudi Ruling Family, the King of Jordan, nor the Pakistani or Egyptian dictators.
For us to get any type of grip on this situation, we need to excape the narrowness of our vision and rhetoric.
First, we are lying to ourselves and the world when we say our middle eastern goal is "democracy," and that our middle eastern allies are "friends of freedom."
All of our allies in the middle east are tyrants and dictators and we have put no real pressure on them to democratize during the last 50 years.
(to be continued...)
Bhutto Death: Links
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U.S. Considers New Covert Push Within Pakistan
This article is by Steven Lee Myers, David E. Sanger and Eric Schmitt.
NYT, 1-6-08
http://www.nytimes.com/2008/01/06/washington/06terror.html?hp=&pagewanted=print
WASHINGTON — President Bush’s senior national security advisers are debating whether to expand the authority of the Central Intelligence Agency and the military to conduct far more aggressive covert operations in the tribal areas of Pakistan.
The debate is a response to intelligence reports that Al Qaeda and the Taliban are intensifying efforts there to destabilize the Pakistani government, several senior administration officials said.
Vice President Dick Cheney, Secretary of State Condoleezza Rice and a number of President Bush’s top national security advisers met Friday at the White House to discuss the proposal, which is part of a broad reassessment of American strategy after the assassination 10 days ago of the Pakistani opposition leader Benazir Bhutto. There was also talk of how to handle the period from now to the Feb. 18 elections, and the aftermath of those elections.
The Bush administration has not formally presented any new proposals to Mr. Musharraf, who gave up his military role last month, or to his successor as the army chief, Gen. Ashfaq Parvez Kayani, who the White House thinks will be more sympathetic to the American position than Mr. Musharraf. Early in his career, General Kayani was an aide to Ms. Bhutto while she was prime minister and later led the Pakistani intelligence service.
But at the White House and the Pentagon, officials see an opportunity in the changing power structure for the Americans to advocate for the expanded authority in Pakistan, a nuclear-armed country. “After years of focusing on Afghanistan, we think the extremists now see a chance for the big prize — creating chaos in Pakistan itself,” one senior official said.
In the past, the administration has largely stayed out of the tribal areas, in part for fear that exposure of any American-led operations there would so embarrass the Musharraf government that it could further empower his critics, who have declared he was too close to Washington.
Even now, officials say, some American diplomats and military officials, as well as outside experts, argue that American-led military operations on the Pakistani side of the border with Afghanistan could result in a tremendous backlash and ultimately do more harm than good. That is particularly true, they say, if Americans were captured or killed in the territory.
Critics said more direct American military action would be ineffective, anger the Pakistani Army and increase support for the militants. “I’m not arguing that you leave Al Qaeda and the Taliban unmolested, but I’d be very, very cautious about approaches that could play into hands of enemies and be counterproductive,” said Bruce Hoffman, a terrorism expert at Georgetown University. Some American diplomats and military officials have also issued strong warnings against expanded direct American action, officials said.
Hasan Askari Rizvi, a leading Pakistani military and political analyst, said raids by American troops would prompt a powerful popular backlash against Mr. Musharraf and the United States.
In the wake of the American invasions of Iraq and Afghanistan, many Pakistanis suspect that the United States is trying to dominate Pakistan as well, Mr. Rizvi said. Mr. Musharraf — who is already widely unpopular — would lose even more popular support.
Bhutto Death: Links
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Remember him? Bush begins Middle East tour
He is the forgotten leader, scorned by his people, disowned by his party. This week George Bush has a last chance to undo the damage done by his presidency as he begins a Middle East tour
By Leonard Doyle in New Hampshire and Andrew Buncombe in Islamabad
The Independent, (UK) 07 January 2008
http://news.independent.co.uk/world/americas/article3315020.ece
Voters in the United States may have switched their attention to the contest to find his successor, but George Bush will embark on an ambitious nine-day tour of the Middle East tomorrow in a last desperate effort to salvage a legacy from two terms in office overshadowed by a catastrophic foreign policy that has earned him the distinction of being one of the worst presidents in the country's history.
The Bush legacy will not be peace in the Middle East nor an end to conflict in Iraq, but it could be a political earthquake among voters so dismayed by the mess he has made of America's foreign policy and fearful of economic recession that they are deserting his party in droves.
As he prepares to board a plane for Israel and wrap himself in the tattered flag of victory in Iraq, Mr Bush's real legacy to the American people is evident in the disillusionment on display in New Hampshire. Enraged Republicans are switching sides to support the Democrat Barack Obama. Others are backing Mike Huckabee, the maverick Christian conservative hopeful. Both triumphed in the Iowa caucuses on a platform of "change".
Despite being a lame duck and a political liability, Mr Bush has another year to run in the White House, and he seems determined to rescue some shreds of credibility even as key components of his "war on terror" come spectacularly adrift.
His decision to enlist Pakistan's Pervez Musharraf as a stalwart ally after the attacks of 11 September 2001 has badly backfired. Yesterday it emerged that so concerned is the Bush administration about the prospect of al-Qa'ida gaining access to Pakistan's nuclear arsenal in the wake of Benazir Bhutto's assassination that it wants to authorise the CIA to carry out covert operations inside Pakistan. The resurgence of the Taliban in the borders of Afghanistan and Pakistan is yet another concern.
Mr Bush's trip around the Middle East, only decided upon a few weeks ago, is nonetheless the most ambitious of his entire presidency. It marks a belated decision to step up his personal involvement in the quest for an Israeli-Palestinian settlement. Few see any prospect of securing an agreement between the Israelis and Palestinians but remarkably, this is Mr Bush's first visit to Israel or the occupied territories since becoming president seven years ago.
Bush predicts Mideast peace deal this year
By Daniel Dombey in Washington and Tobias Buck in Jerusalem
Published: January 6 2008 20:05 | Last updated: January 6 2008 20:05
http://www.ft.com/cms/s/0/baaa1ad0-bc88-11dc-bcf9-0000779fd2ac.html
George W. Bush has predicted a peace deal this year between Israel and the Palestinians ahead of his most extensive visit yet to the Middle East.
US officials say the president will devote the week-long tour, in which he will travel to six countries and the Palestinian territories, to pushing for Middle East peace, rallying his regional allies against Iran and reviving Washington’s stalled democratisation agenda.
Many Arab countries maintain closer relations with Iran than Washington would like and the White House admits it is disappointed by the lack of progress towards democracy in the region in the past couple of years.
Mr Bush, however, is undaunted. “I believe the time is ripe,” he said of an Israeli-Palestinian deal in an interview with Yediot Ahronot, the Israeli newspaper as he prepared for his trip. “There will be a comprehensive peace signed by the end of this year.”
Mr Bush transmitted an ambiguous message on Israeli settlements, one of the key points of contention, ahead of his visit to Israel, his first stop, on Wednesday. The US, he said, expected Israelis to “honour their commitments” to dismantle illegal settlements but was aware that “realities on the ground” would shape an eventual Israeli-Palestinian border.
Note: Bush visiting as war and crimes against humanity by Israel deepen…
More than 10,000 police will guard Bush during Israel visit
Rory McCarthy in Jerusalem
Monday January 7, 2008
The Guardian
http://www.guardian.co.uk/israel/Story/0,,2236522,00.html
Israeli officials in Jerusalem are to deploy more than 10,000 police officers in a vast security operation ahead of the arrival this week of George Bush, the first US president to visit in a decade.
The security precautions, dubbed Operation Clear Skies by the Israeli security services, are immense. Roads around the hotel will be blocked, despite the huge traffic jams that will entail. A force of 10,500 police and security staff will be deployed and Bush will be flown in to the hotel by helicopter from the airport near Tel Aviv. "There will be so much security nobody will be able to get anywhere near the president," said Micky Rosenfield, Israel's police spokesman.
Separately yesterday, the crisis afflicting Gaza worsened when Palestinian officials said they would now have to cut off electricity for eight hours every day, because Israel has sharply cut fuel supplies. Israel says the cut in supplies is to stop militants firing rockets into its territory.
Kanan Obeid, chairman of the Gazan energy authority, said the strip, home to 1.5 million Palestinians, had only 35% of the power it needed because of fuel shortages. The power plant is to shut down one of its two gas turbines, reducing output further. Water and sewerage systems are now particularly vulnerable.
American Al Qaeda militant urges attacks on Bush
* Adam Gadahn says US defeated on all fronts
* Gadahn attacks Musharraf for supporting US
Pakistan Times, 1-7-08
http://www.dailytimes.com.pk/default.asp?page=2008/01/07/story_7-1-2008_pg7_53
DUBAI: American Al Qaeda militant Adam Gadahn urged Islamist militants to welcome US President George W Bush with bombs when he visits the Middle East this week, Reuters reported.
“Welcome him not with flowers and applause but with bombs and traps,” he said in Arabic on a 50-minute video posted on the Internet on Sunday, which was mostly recorded in English and aimed at the American public. Bush is due to arrive in Israel on Wednesday, the first US president to visit the Jewish state in nine years, in a bid to hasten the search for peace with the Palestinians, AFP adds. He is also due to visit the West Bank as well as five Arab states.
Gadahn, who is also known as Azzam the American, devoted most of the tape entitled “An Invitation to Reflection and Repentance”, to a detailed explanation of the shortcomings of US foreign policy and Western Christian civilisation and their defeat at the hands of Islam and Muslims.
Spectacular amounts: “The first question Americans might ask is, has America really been defeated? The answer is yes and on all fronts,” said Gadahn, who was wearing a long beard, glasses and an Arab-style red and white chequered scarf.
“American and coalition officials have stated repeatedly that they are unable and unwilling to face the mujahideen in Afghanistan and Iraq militarily but are still trying to win the battle for hearts and minds, which they have also lost in spectacular fashion despite the equally spectacular amounts they have spent in pay-offs and propaganda.” The message strongly criticised Egypt’s President Hosni Mubarak and Saudi Arabia’s King Abdullah who will welcome Bush to their countries as part of his eight-day tour of allies in the region.
Musharraf: It also contained a renewed attack on President Pervez Musharraf over his support for the US. Gadahn also listed Pakistan, Chechnya, North Africa and Somalia as areas where the US was losing its battle against Islamist groups.
Hidden History of Israel:
Born in Terror, Ethnic Cleansing, and Genocide; Perpetuated by Crimes against Humanity
Alex Wierbinski, Berkeley, Ca., reprinted on September 20, 2007
"Israel" Thievery of Arab Lands continues from 1948 to Present
Alex Wierbinski, Berkeley, Ca., July 20, 2007
Israel has no legitimate basis. Israel is based on violence, ethnic cleansing, and the military, economic and political power of the United States, and nothing else.
All of Israel is occupied land gained through terrorism, war, and other crimes against humanity.
Until the US recognizes these facts, the middle east will resist, and eventually overthrow, our Saudi, Jordanian, and Egyptian Dictators. Then the middle east will destroy Israel.
Until the US defines "democracy" as something more than a thin cover for Corporate control of our nation's politics, our middle eastern foreign policy will continue to be nothing more than a tool of the Oil and Israel lobbies. Both political parties have been corrupted by these fascistic interests, and both parties are incapable of dealing honestly with the middle east.
The dismal situation in Iraq represents the final failure of Democracy in America, not the spread of American Democracy.
America's unwarranted attack on Iraq represents the victory of wealth and power over our American democracy, and our foreign policy. In the case of the Iraq war, we got an example of the massive power of the Oil and Israeli lobbies to easily use America's power and wealth to advance their criminal agendas. They have stolen yet another nation. Except this time their hand is wedged tight in the cookie jar.
The Iraq war, and how it came about, does not represent the actions of a democratic country. The Iraq war represents the actions of a corporate fascist state.
Unfortunately for us, the majority of Arabs who are suffering under our various middle eastern dictators and the iron fist of our Jewish colony, have concluded that what we call "democracy" is completely unjust, patently immoral and unacceptable, and are instead embracing political forms based on religion.
Sadly, these religiously based systems, despite their considerable drawbacks and shortcomings, provide considerably more justice than our "democratic" system delivers.
The fault for the rise of extreme islamic radicalism lies with us, with us for allowing our own corporate christian taliban to smash our democracy, and seize the reigns of our foreign policy.
The rise of radical islam is nothing more than a response to our own extreme corruption, which is also the source of the loss of our own democracy.
This tragedy did not begin with 911, as our political and media liars constantly tell us. 911, and many more tragedies to come, began with the loss of our democracy, and our imposition of dictators and tyrants on countries in every continent in the world.
Resistance to American-supported puppet governments around the world is growing rapidly as colonized nations are rejecting our farcical "democratic" governments run by dictators, and seizing the right to define their own identities, cultures, and political systems.
This inevitable post-colonial evolution will only stop if America recognizes the right of every country in the world, especially the nations sitting on top of Oil, mineral resources, and labor, to self-determination and self-definition without us threatening them with war, death squads, or military coups to seize their assets.
If we continue to pursue our program of corporate globalism, the post colonial revolution we are experiencing will end with the violent destruction of our middle eastern dictatorships, Israel, and the shattering of our globalized web of corporate thievery.
A Democrat Congress and President is not going to change this scenario one iota. Until we reimpose democracy on our corporate politicians and release our "free" press from its corporate bondage, the corporate politicians of both parties will only be capable of spreading our corruption and tyranny, not our Democratic Principals, around the world.
The global revolution of democracy must start here, not over there.
Mearsheimer and Walt, March 2006, THE ISRAEL LOBBY AND U.S. FOREIGN POLICY.
Book Review by Stepen Lendman, The Ethnic Cleansing of Palestine, by Ilan Pappe.
Book Review by Kim Petersen, The Ethnic Cleansing of Palestine, by Ilan Pappe.
Corruption Updates 37, 1st article on the page, "Poll: Israel, Iran, US most Negative Countries in World"
Corruption Updates 42, 4th article on the page, "Bolton Admits US ALLOWED ISRAEL TO DESTROY LEBANON"
Corruption Updates 64, 3rd article on the page,"British Academics’ Union Endorses Israel Boycott"
Corruption Updates 64, 4th article on the page, "Largest Labor Union in Britain May Consider a Boycott of Israel"
Corruption Updates 83, 10th article on the page, "Top Official of Hamas Is Rebuffed Over Talks"
Corruption Updates 90, 10th article on the page, "Israeli Settlements Found to Grow Past Boundaries"
Al-Ahram, Egypt, 30 August - 5 September, 2007; Israel eyes Gaza
Al-Ahram, Egypt, 30 August - 5 September, 2007; 'No elections if Hamas will win'
NY Times, September 12, 2007; U.S. Confirms Israeli Strikes Hit Syrian Target Last Week
NYT, July 23, 2007; In Arabic Textbook, Israel Calls ’48 War Catastrophe for Arabs: Arabs in Israel Live under Jim Crow Apartheid
NYT, July 31, 2007; U.S. Arms Plan for Mideast Aims to Counter Iranian Power: Bush fuels middle eastern Arms Race
BBC NEWS: September 14, 2007; Small Israeli force enters Gaza
Al Ahram, 13 - 19 September 2007; Marching to war with cold feet
Corruption Updates 127, 3rd article on the page, IAEA chief lashes out over Israeli raid in Syria
Agence France-Presse, October 28, 2007: ElBaradei: No Evidence Iran is Making Nukes
Corruption Updates 127, 4th article on the page, Sabra and Shatila Massacres, 25 years later
Israel Links
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Report Calls Israeli Courts Unfair
By ARON HELLER, The Associated Press
2008-01-06 19:18:19.0
Current rank: # 98 of 5,881
JERUSALEM -
http://www.examiner.com/printa-1141405~Report_Calls_Israeli_Courts_Unfair.html
Israel's military court system for Palestinian suspects in the West Bank produces almost automatic convictions, an Israeli human rights group charged Sunday.
The group, Yesh Din, said in a new report that in 2006 more than 99.7 percent of those accused were convicted, 95 percent in plea bargains.
Yesh Din said its inquiry, which included attending more than 800 hearings and conducting extensive interviews with lawyers and court staff, concluded that suspects were often unable to present a full defense with effective counsel.
The Yesh Din report said, however, that military court proceedings can be startlingly brief, citing a study of 38 hearings where prosecutors sought to extend suspects' detention in custody until the end of case, which generally means remand for a year or more.
Of those 38 hearings, Yesh Din says, seven lasted between two and four minutes, 19 lasted between one and two minutes and 12 were over in less than a minute.
Yesh Din, which said that its yearlong study was the most extensive of its kind to date, found major failings in the courts' practices: Hearings were held in Hebrew and simultaneous translation into Arabic was mainly carried out by conscript soldiers rather than professional interpreters, with the result that suspects, and their attorneys, often did not understand the charges.
"Most are detained in Israel and their attorneys are not able to meet them," said Michael Sfard, Yesh Din's legal counsel. In addition, minors were often tried as adults and detained at length before being charged.
Sfard said the 0.29 percent acquittal rating in 2006, or 23 cases out of 9,123, was most jarring.
"We think that this is an outrageous number which clouds the presumption of innocence," he said. "It is unreasonable that a justice system will have such a low figure of victory of the defense."
The military courts were established after Israel conquered the West Bank and Gaza in the 1967 Middle East war, and have jurisdiction over Palestinians charged with security-related and criminal offenses.
More than 150,000 Palestinians have been prosecuted in these courts since 1990, and about half the 9,000 prisoners currently being held in Israel were sent to prison by the military courts, according to Yesh Din.
See commentary above
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Fed should stop rate cuts, says fund chief
By Deborah Brewster in New York
Published: January 6 2008 20:06 | Last updated: January 6 2008 20:06
http://www.ft.com/cms/s/0/9eb761d6-bc90-11dc-bcf9-0000779fd2ac.html
Ray Dalio, the billionaire fund manager who was among the experts to advise the US Federal Reserve in recent months, has said interest rate cuts are not the solution to the turmoil in the credit markets.
Rather, Mr Dalio, founder and chief investment officer of money manager Bridgewater Associates, said the longer-term solution would involve currency policies – such as a revaluation of the Chinese renminbi – to address the US’s trade imbalance.
“Our current credit problems are the flip side of our balance of payments problem,” he told the Financial Times. “The world has been awash with liquidity and money has been pouring in from abroad, so lots of money had to get invested fast.
“The dollar being the world’s dominant reserve currency, coupled with the major surplus countries having their currencies pegged to the dollar, has led to a dollar denominated debt bubble – a lot of irresponsible lending in dollars. The mortgage crisis is just one reflection of this.”
Mr Dalio called for the Fed to stop cutting interest rates and to set a “realistic” target rate for US growth of 2.2 per cent a year. That would be the lowest since the 1930s, and below the 2.5 per cent that is the Fed’s target.
“The basic problem is that, at current exchange rates, Americans will not earn enough income to pay for their spending, so they will either get deeper into debt or sell off their assets to make up the difference,” he said.
7) The Article linked below was Abstracted from the source cited.
Vice-chairman admits mixed messages over Fed policy
Suzy Jagger in New York
From The Times, (UK) January 7, 2008
http://business.timesonline.co.uk/tol/business/industry_sectors/
banking_and_finance/article3142442.ece
The vice-chairman of the US Federal Reserve has admitted that the central bank’s message has become confused because of the wide range of opinions expressed by members of its interest-rate-setting committee.
Donald Kohn told the American Economic Association that “the resulting dispersion of messages has bothered market participants seeking clear, unambiguous guidance about the views of the central bank”.
His comments came only three weeks before the Federal Open Markets Committee (FOMC)’s next interest-rate-setting meeting, on January 30, when the Fed is widely expected to cut the cost of borrowing for the fourth time since September.
Data published at the end of last week showing that America’s jobs market had effectively ground to a halt have raised expectations that the Fed is more likely to cut interest rates by half a percentage point to 3.75 per cent in order to avert a recession.
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The rise and fall of private equity deals
Siobhan Kennedy
From The Times, (UK) January 7, 2008
http://business.timesonline.co.uk/tol/business/
industry_sectors/banking_and_finance/article3142489.ece
The volume of British buyouts tumbled 80 per cent in the fourth quarter, as the squeeze on global credit led to the quietest three months in nearly five years, data published today shows.
The value of private equity buyouts plunged to £2.9 billion from £15.4 billion in the third quarter as high-profile deals, such as a proposed acquisition of J Sainsbury, were shelved in the wake of the credit crisis.
The figures point to a much quieter time ahead for private equity than was previously expected.
As the credit crisis took hold, banks abruptly curbed lending on bigger deals. Yet the figures from the Centre for Management Buyouts indicate that the middle and lower end of the market has also been hit hard. Tom Lamb, co-head of Barclays Private Equity, which carried out the research with the buyout centre, said: “This has been the quietest single quarter for UK buyouts since 2003, and puts the market back to 1997-98 levels.”
Mr Lamb said: “It could take several years to invest the current generation of funds, compared to the two or three years which has become the norm.
“Buyers are waiting for prices to come down and sellers are . . . waiting for prices to recover. It usually takes about six months for everyone to come to terms with the new cycle and get going again.”
In the past, private equity has avoided liquidity problems by selling companies to each other, but those so-called secondary buyouts are also feeling the pinch. In 2006, they represented 12 of the top 30 exits, but there was not even one secondary deal in the fourth quarter.
9) The Article linked below was Abstracted from the source cited.
Credit crunch hits financial incomes
By Sean Farrell, Financial Editor
The Independent, (UK) 07 January 2008
http://news.independent.co.uk/business/news/article3315062.ece
Business levels in the financial sector fell at the fastest pace for more than 16 years at the end of last year as the credit crunch drained confidence from the industry, a closely watched survey showed.
Banks, building societies and securities traders were the main casualties as income
slumped and transactions dropped in the fourth quarter of 2007, the Confederation of British Industry/ PricewaterhouseCoopers survey revealed.
The survey results come on top of Bank of England figures last week showing an unexpectedly severe tightening of lending by cash-strapped banks seeking to minimise risk. The gloomy mood of the financial sector will add to reasons for the Bank of England's Monetary Policy Committee to cut interest rates at this Thursday's meeting.
Ian McCafferty, chief econ-omic adviser at the CBI, said: "After two years of strong growth there has been a clear turnaround within the financial services sector. The credit squeeze has delivered a sharp shock to business volumes over the past three months, and it seems that difficulties are likely to persist for some time yet."
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Danger ahead: The prospect of recession again confronts America
By Krishna Guha
Published: January 2 2008 20:03 | Last updated: January 2 2008 20:03
http://www.ft.com/cms/s/0/8fc8a006-b969-11dc-bb66-0000779fd2ac.html
America has entered 2008 in greater danger of recession than at any stage since the collapse of the internet bubble in 2000-01, as the world’s largest economy struggles to maintain growth in the face of the credit squeeze, a housing slide and high oil prices.
Fourth-quarter growth for 2007 looks likely to come in at 1 per cent or less on an annual basis, while the current three months are unlikely to be much better and could even be worse. The only question is whether the economy will struggle through this sickly period and gradually regain strength over the course of the year – or succumb to its ailments and, with growth turning negative, fall into recession.
Jobless figures stoke fears of US recession
By Krishna Guha in Washington and Daniel Pimlott and Michael Mackenzie in New York
Published: January 4 2008 14:47 | Last updated: January 4 2008 19:10
http://www.ft.com/cms/s/0/9f610b2a-bad1-11dc-9fbc-0000779fd2ac.html
The prospect of a US recession rose on Friday after new data revealed a sudden increase in unemployment and weak job creation in December, sending the dollar lower and equities sharply down.
The figures intensified pressure on the Federal Reserve to cut interest rates by at least 25 basis points and possibly by 50bp at its policy meeting this month to help sustain growth.
Shares were immediately hit by the data, which Goldman Sachs said suggested the US is “on the edge of recession”. The S&P 500 index was down 1.7 per cent at midday trading in the US, with the UK FTSE 100 down 2 per cent and the FTSE EuroFirst index down 1.8 per cent. Earlier, the Nikkei closed down 4 per cent, although Hong Kong closed up
Only 18,000 jobs were added in December, the labour department reported, the lowest number since August 2003 and far less than the 70,000 predicted by economists.
Government hiring accounted for more than the entire increase, with private sector employment falling by 13,000. Meanwhile, the unemployment rate jumped to 5 per cent, from 4.7 per cent, its highest level since November 2005. While monthly labour market data can be volatile, the report suggests the US economy either stalled or came close to stalling in December.
Housing-credit crisis exposing the rotten core of American Markets and Economy
Originally written August 17. Updated Nov 24,
The recent downturn in housing and the accompanying mortgage security crisis are merely the exposed tip of the deep irresponsibility at the center of our financial and political markets. The housing downturn is a superficial crisis that has exposed the fundamental financial imbalances produced by the incompentence and greed at the center of our economy. These imbalances are threatening to trigger a global crisis.
Although the fed's recent reductions in the Overnight and Discount Rates are large, rate reductions alone can not solve the underlying problems below the housing and mortgate security downturns. The rate reductions are a bone that the fed threw to the stock market. The recent fed rate reductions have accelerated, not diminished the actual crisis.
In normal times, these fed moves might work. Wall Street will not know what the mortgage securities are worth until the real estate market stabilizes, and that will not happen for at least 18 months. Sales in the real estate market depend on mortgage securities to fund their loans. The interest rates on real estate depend on the perceived risks and relative values of the mortgage securities. The fed reductions would normally reduce risk to all of the players in this chain of market relationships. If times were normal.
Rate reductions would be ok, if the US were alone in world and lived in a bubble. But at least 20% of American debt has foreign funding sources. China, England, and Saudi Arabia are holding trillions of dollars in their national reserves that are plunging in value. The fed's rate reductions, while propping up domestic credit, are accelerating fall of American securities, and American credit-worthiness across global markets.
The real problem, below our domestic and foreign credit crisis, is that the fundamental engine of American profitability is based on rates of growth that have proven to be unsustainable in the present, let alone into the future. These unsustainable growth rates have been fueled and funded by low-wage foreign labor, low interest foreign loans, and economic trickery with our retirement money. It appears that our citizens are rejecting the unlimited movement of foreign labor into the US, and our foreign lenders are looking to reduce their exposure in dollars.
During the last 20 years housing prices have been rising rapidly on a spiraling updraft of housing prices. To the forces of demographic growth and cheap money, another key source of funds behind this economic updraft is the massive amounts of liquidity injected into the equities market when Congress deferred taxes on stock investments made for retirement purposes. This alone pumped 40 billion a month into equities during the height of the dot-com boom.
Rising housing prices have been supported by this ever-expanding supply of market liquidity and credit to maintain upward pressure on prices. Between 1989 and now, this combination of economic tricks was sufficient to steadily push housing prices up. The 401k mutual fund money has also distorted the value of stocks, pushing equity prices higher than honest valuation merits, and contributing significantly to the dot-com bubble.
This monthly flow of tens of billions of 401k money into equities has also contribuited significantly to the speculative character of today's market. Despite this massive liquidity, the upper limit of housing price growth has been reached. At this point it appears that there is not enough liquidity nor credit in the US, or any will in global market, to maintain upward pressure on housing prices. The housing market reached the size where there was not enough buyers, nor credit, to continue further expansion.
This rise in housing prices has been going on for decades, but was supercharged after the dot-com bust. It was after the bust that the housing bubble was initiated to carry the economy across the down time of the dot-com bust.
After starting the housing bubble, Greenspan had five years to bring rates up sufficiently to quash the radical speculation in housing, defend the international value of the dollar, and build a sufficient rate cushion to allow future rate cuts in a downturn like the one we are now facing. Greenspan failed to respond.
The reason we are in this crisis now is that Greenspan did not raise interest rates enough as the economy rose out of the dot-com bust, but instead kept rates low, and ran the housing bubble through the roof.
This allowed speculation to seriously distort housing and housing securities while simultanously weakening the dollar. By not raising rates during the housing run-up, the fed now finds itself poised between a weak dollar and a weak market while maintaining historically low interest rates. This position neutralizes the ability of rate cuts to productively stimulate markets without seriously damaging the value of the dollar.
This means that housing prices for the last 20 years have had nothing to do with actual demand or value. Prices were established and driven upward by debt-based speculation, rather than responsible investment. The housing run-up was based on naked speculation fueled by cheap money.
We are experiencing an rather rapid reversion of prices in the housing market from speculation back to prices based on the level of sales that can be supported by the actual wealth of average individuals in society, and what they can responsibly purchase.
Unfortunately for our housing market, the middle and lower classes have been stripped of their share of the national wealth during the last 30 years, and are incapable of restarting the housing market, let alone maintain consumer consumption on their diminished share of the nation's wealth without a fat line of cheap credit.
The reversion of prices to normal market conditions has not only exposed millions of homeowners to foreclosure and made the value of all mortgage based securities uncertain, but it has triggered a global "moment," a global realization that the American markets and financial system are not properly valuing assets, or responsibly structuring credit and growth.
This has made it vitally important to every player in the global economy, including nations, global investors, and global business interests, to immediately ascertain the actual value of all American assets, especially the dollar. This realization has exposed all american assets, especially the dollar, to a radical reevaluation across global markets.
Although the Fed's recent rate reductions have marginally shored up domestic credit markets, they have destabilized the international institutions holding mortgage securities by significantly undermining the value of their dollar holdings. This has damaged global confidence in the dollar, and has intensified the necessity for international financial institutions to reassess not just the value of the dollar, but the centrality of its role in international transactions.
This does not matter as much to domestic financial institutions, but it puts international holders of dollar-denominated securities in a position of getting screwed by either outcome: If the securities fail, they are screwed, and if the securities are preserved by devaluing the dollar, they are also screwed.
The fed's rate reductions were the final trigger that caused global markets to finally seriously reassess the value of the dollar, after over a decade of weakness. This reevaluation has in turn exposed the fact that the massive US corporate profits taken during the last 10 years have been made in an economy that is drowning itself in debt.
The recent massive downturn in the dollar signals the world has had a change in their perception of not just the dollar, but of the American economy itself. This has caused such a precipitous drop in the dollar that major players can no longer just reevaluate the value of the dollar, but are now reassessing the dollar's central position in global markets.
Why we are here
The American expansion during the last 30 years can be characterized as a frenzy of consumer consumption married to a frenzy of corporate profits. The consumer and corporate elements of the expansion are connected at the hip, both in economic, as well as psychological terms. Each side requires the greed, ignorance, and justification of the other side to maintain its own position.
Consumption and profit are, in fact, different manifestations of the same selfish irresponsibility. The consumer mentality expresses lower class selfishness by exposing that "our" working class has accepted debt shopping and "consumption," as the nature and goal of life. Simultaneously, our massive expansion has revealed that our elite and business classes consider the nature and goal of life to be the pursuit of unbridled growth, profit, and power.
Both sides of our great expansion, the worker and the businessman, are dependent on gross consumption, debt, and irresponsible "profits" for their mutual existence. Both sides of this sick equation have been based on nothing more than irresponsible growth, fueled by massive demographic expansion, funded by irresponsible speculation.
This irresponsible expansion has created a vast American private debt that exceeds our ability to repay, either today, or out of projected future profits. The bursting of the housing bubble has made this very clear to all disinterested observers.
In other words, our expansion, and the profits generated by the corporations for the last 20 years, have been funded by expanding consumer debt, which until recently was collateralized by the speculative growth in the value of the housing and equities markets, not by actual economic growth and expansion of the wealth of consumers.
Although our population growth is very real, the real growth in the overall wealth of our country has been a mirage funded by sub-prime loans and cheap money.
The last 30 years of massive demographic and economic growth has been used as cover by our corporate aristocracy to put aside our democratic practices, and loot our economy, drain our infrastructure, and move the bulk of the wealth of our country from the bottom and middle to the top. That is the real root of our housing, credit, and currency crisis.
Our country has plunged itself into an unsustainable downward spiral of massive debt to fuel this 30 year upward spiral of profit and physical expansion that pushed corporate profits and consumer consumption to historical levels. Now the world is going to balance the books, because we have refused to.
The result is that the housing bubble is triggering a cascading collapse that is traveling through our set of nested economic imbalances. The bursting of the housing bubble has sparked a mortgage crisis which has initiated a credit crisis which is triggering a reevaluation of all dollar-denominated assets in the world.
At the end of this cycle, we are going to find that our inability to face our housing, mortgage, and credit bubbles has significantly diminished the willingness of foreigners to finance American consumer credit. It started in housing, moved into credit, and is now collapsing the value of the dollar.
This in turn has exposed the world to the sad fact that American corporate profits are being sucked out of an economy that is, and has been, losing money.
So, independent of the vastly expanding profits of the corporations, the ultimate basis of American profit has been exposed as a pyramid scheme based on the availability of ever-expanding debt to payback previous debt. This is now common knowledge among global investors. The inevitable result, which we are now experiencing, is that the value of the dollar is shrinking faster than corporations can increase their profits to offset the actual loss of value.
The Fed's infusions of cash and lowering of the discount rate will do nothing to re inflate the speculative bubble in housing, nor will it give the market clarity as to the actual value of the mortgage securities. But it will accelerate the dollar's loss of value, which will have the overall effect of tightening, rather than loosening, credit.
The only thing that will save millions of families from foreclosure and mortgage securities from collapsing, is for housing prices to continue rising in value. That's not going to happen.
The real estate market can no longer depend on the middle-class to pull up the nation by its own bootstraps, as the middle-class has been robbed of their share of the national wealth.
Credit for the real estate market is no longer based on national or local conditions. American credit is now subject to, and dependent upon, the changing global estimation of the value of the dollar, and the risks associated with dealing in dollars, to obtain funds for consumer credit. The world is not only demanding America pay more for the credit necessary to maintain our consumer spending, but they are making much less money available to fund American debt.
These dollars, which would normally loaned back to the US by our dependent trading partners, are now being invested in better, more secure opportunities.
It appears that the big holders of dollars are dumping them on the market, not by selling dollars, but by buying huge amounts of global commodities with their excess dollars. I believe that the recent large price movements in global commodities indicate that the big global players are offloading massive amounts of dollars into commodities such as oil, copper, wheat, gold, and a range of other commodities.
It looks to me like the Brits, Arabs, and Chinese are selling dollars without going through the foreign exchange markets by buying commodities that they will later sell for anything but dollars.
These radical increases in all global commodities prices are working through the markets as I write, and are a direct indication in the global loss of confidence in the dollar.
Long before housing could stabilize, in a couple of years from now, the shocks from the housing and credit markets on the global economy pose a significant likelihood that the value of the dollar will drop sufficiently to limiting the credit available to restart housing, thereby stifiling any housing recovery, and putting significant downward pressure on our economy for years to come.
The net result of all this will be a significant decline in American economic activity accompanied by a significant upturn in prices. This portends a long downturn, not just for the American housing market, but of American consumption itself.
It appears to me that we are heading into a significant downturn that will be followed by an extended period of stagflation.
We are entering a very dangerous situation where it is highly possible that the world will retract a significant amount of our credit until our economy, rather than our corporations, actually becomes profitable.
The fed's hands are effectively tied. If the fed raises rates, the dollar will proportionally stabilize, but the housing speculators will scream in pain. If the fed drops rates, the dollar will plunge, and our domestic party will continue for a bit longer, as the world burns dollars around us.
The fed is damned if they do, and damned if they don't, raise rates.
At this time two things are clear: Housing will continue to fall for 18 months to 2 years, and the credit crisis will deepen in response to the fall in value of both housing and the dollar.
At this point no amount of Fed intervention will prevent the various markets from falling precipitously. The failures of the housing, auto, credit markets and the collaspe of the dollar will eventually pull the dow down to between 6800 and 7200. I see this as the market level that our actual economic activity will support. I see us hitting this low by June of 2008.
American economic weakness presents a significant risk of bringing down unstable foreign economies, such as China, and likewise, economic disruptions in China could cause even greater disruptions in our housing, credit, and currency markets that would make our present imbalances seem insignificant.
Our indebtedness and economic trickery is exposing the whole world to a significant risk of a sustained global downturn in economic activity, if not an outright global depression.
But nobody really knows just how these massive American debt imbalances will work out. The disturbing fact is that the US is not doing a damn thing to address or change the fundamental causes of our dangerous position: Irresponsible growth based on speculation.
That's where we are right now, between a rock and a hard place. Uncertainty and instability will characterize the markets until the US stops buying on credit and moves the basis of consumption off debt.
This is why the Fed's pumping the financial markets with cash, and dropping the interest rates are so disturbing. Rather than paying the bills, and only growing responsibly from now on, the fed is trying to grow our way out of this jam with cheap money, when it was our irresponsible growth based on cheap money that brought us to this crisis.
Unfortunately for our corporate devils and their consumer minions, we have run out of the money, energy and water with which to grow out of the hole our previous growth has put us in. We are tapped out, and this era of irresponsible speculative growth is officially over.
It's time to pay the bills
The Fed cannot stop the global markets from reevaluating American housing, American credit-worthiness, the dollar, and ultimately the global role of the dollar. Consequently, the value of all assets based on the dollar are now uncertain.
This reevaluation is now reverberating around the all of world's interdependent markets. It will only slowdown and stabilize when the repayment rate on our debt exceeds the rate at which we are borrowing.
And that's not going to happen voluntarily.
Hang on tight, this is going to be a crazy ride.
era of easy money over, financial times, 1-2-08
next essay in series: The rotten core of the American Economy: Our Corrupted Democracy
previous essay; Markets will not settle until all assets are revalued, and housing reestablishes price and volume, August 17, 2007
the beginning of the crisis; Markets about to kill economy, Aug 4, 2007
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KENYA
1] Kenya devolving into chaos and violence
1b] Kibaki offers unity government
1c] Ethnic cleansing in Kenya
Pakistan
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2b] Bhutto: Daughter of the West
3] US to attack Pakistan?
Bush to Israel
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4b] Bush predicts peace in Middle-East as israel continues war crimes: deja-vu of victory in iraq claims
4c] Israel to isolate bush: Why didn't we think of that? (Note bush visits as israel deepens their war crimes)
4d] Kill Bush: American Taliban calls for death of Bush
5] Israel runs bush-style military tribunals which assure conviction
US Econ Tottering
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7] Fed confusion at brink of crisis
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9] Financial profits drop precipitiously in UK
10] Recession? Now, later, or worse to come?
10b] Unemployment figures indicate economy stalling