Green Rats Flee Sinking Ship of Global Warming

February 19, 2010 (LPAC) — Yvo de Boer, the Executive Secretary of the United Nations Framework Convention on Climate Change, the U.N.'s top "climate" official, announced today that he will leave that post in July, to work in the private sector. Despite the flop of the December 2009 Copenhagen conference on climate change held under de Boer's aegis, and the reported "uncertainty" over whether the failed climate treaty can be passed in a Mexico conference in December 2010, de Boer says "... the time is ripe for me to take on a new challenge." (This is roughly the equivalent, in the bureaucratic world, of the tearful politician who professes a new desire to spend time with his family.)

The last few months have been tough for de Boer, as his non-accomplishments for the past four years at the U.N., have proven to be built on sand. The failure of his Copenhagen conference occurred just after hacked e-mails from the East Anglia Climate Research Unit (CRU) showed its researchers plotting to manipulate "global warming" data to stampede governments' policy-making. More recently, supposed scientific data in the report of the Intergovernmental Panel on Climate Change, an entity created to advise de Boer's office, has been exposed as specious. And just the other day, leading CRU figure Phil Jones admitted in a BBC interview, that from 1995 to the present, there has been no statistically-significant global warming.

De Boer asserted in his resignation statement, that governments must work with private businesses to move forward in cutting emissions around the globe; this is presumably what he'll be pursuing in his new job, as a consultant on environmental sustainability to businesses and universities, for KPMG.

But perhaps Secretary de Boer has jumped the wrong way, into the world of "business-[FILL IN BLANK] partnerships" so popular, 'til now, in policy-making. Yesterday's Wall Street Journal reported that three companies — oil majors BP PLC and Conoco Philips, and heavy-equipment manufacturer Caterpillar Inc. — had quit the U.S. Climate Action Partnership (US CAP — get it?), an influential environmental-business lobbying group focussed on shaping U.S. climate-change legislation. The US CAP, the Journal reports, "had been instrumental in building support in Washington for capping emissions of greenhouse gases." Spokesmen for BP and Conoco said the companies still support climate-change legislation — that's good PR, of course — but want to work outside US CAP's umbrella. Conoco's spokesman said that while US CAP is devoted to passage of legislation per se, Conoco is concerned with the details of what might be in the bill. Caterpillar, for its part, says it will devote its efforts to commercializing green technologies. The Journal reports that support for curbing greenhouse gas emissions waned as the economy worsened, and notes that the Obama Administration says, that if Congress does not pass legislation, it will accomplish the goals administratively, through Environmental Protection Agency rulemaking.

Is Britain the Next Greece and Spain?

February 19, 2010 (LPAC)—The British government has posted its worst borrowing figures on record for a January in what the Guardian calls "another blow to Britain's attempts to reassure other countries it is not the next Greece or Spain."

"The Office for National Statistics (ONS) said public sector net borrowing — the gap between the Exchequer's tax-take and its spending — was £4.34 billion compared with a repayment of £5.27 billion a year earlier. This is the first deficit for a January since 1993 when records were first taken. The figure was also much worse than the £2.8 billion repayment forecast in a Reuters poll by City analysts, who in previous months had largely underestimated the state of the public finances."

The Guardian comments further: "Britain's own relatively high deficit, its slow growth rate and high inflation have prompted some to speculate it could be the next country to alarm global markets. The pound weakened against the dollar and the euro and British government bond prices fell as January's borrowing shock fuelled worries about Britain's fiscal position."

The Times Online reports that the Government is on course to run up a higher budget deficit this year than Greece.

The deficit is attributed to a collapse in revenues in a month that is supposedly one for high intake.

The Daily Telegraph reports that the number of people who are neither working nor seeking employment reached 8.08 million in the last three months of 2009, the highest on record. This, out of a population of 61 million, and comprising 21.3% of working-age adults.

The Office of National Statistics reports that those seeking unemployment benefits increased by 23,500, to 1.64 million, in January, the highest since April 1997. Official unemployment is 2.46 million. This has shocked the talking head economists, who had forecast a fall of 10,000 from the unemployment rolls. This is euphemistically termed as to be pointing in the direction of a "double-dip recession."

The Independent reported that underemployment has increased by 700,000 to 2.8 million, which, it says, masks the poor employment situation in the U.K. It is worse if one considers youth unemployment, which includes those who are continuing their education because they can't find a job. Plus those already employed who are looking for second jobs.

Meanwhile, the Bank of England announced a 3.5% inflation rate for January, up from an average 2.9% for the previous 12 months. The Bank of England blamed the increase in VAT and oil prices, claiming that it will come down again in a few months. Even the Daily Telegraph was not so sure, writing, "inflationary pressures may continue to prove surprisingly persistent. Easy money globally has been boosting prices and favoring commodity price inflation. And the pound's continuing frailty brings inflation into the U.K. economy..."

State Pension Funds $1 Trillion Short -- or, Is It $3 Trillion?

February 19, 2010 (LPAC)—According to a new report from the Pew Center on States, states promised current and retired workers a total of $3.25 trillion in benefits through June 30, 2008, but state governments had contributed only $2.35 trillion to their benefit plans. In eight states—Connecticut, Illinois, Kansas, Kentucky, Massachusetts, Oklahoma, Rhode Island, and West Virginia—more than one-third of the total pension liability was unfunded. Two additional states—Illinois and Kansas—had less than 60 percent of the necessary assets on hand. Illinois has the largest pension-funding gap, with only 54% of the necessary contributions made to pay promised benefits to current and future retirees. Only four states—Florida, New York, Washington and Wisconsin—had fully funded pensions systems.

But as of the end of 2009, the shortfall is at least three trillion dollars. Orin Kramer, chairman of New Jersey's investment council, told the FT that he puts the shortfall for the US public pension system at more than $2 trillion by the end of 2009, with another $1 trillion for healthcare.

Insanely, the Pew Center proposes to address this crisis by lowering benefit levels and increasing the retirement age for new employees.

Credit Suisse Says Spanish Banks Hiding Losses

February 19, 2010 (LPAC)—Lyndon LaRouche has indicated that, not Greece, but the virtual British colony which is Spain, with its London-controlled Banco Santander, is the detonator to bring down the Euro system. Now, after UBS's (Union Bank of Switzerland) report yesterday that the Spanish housing market is a "Ponzi scheme," Credit Suisse has issued a 68-page report to investors which points to Spanish banks hiding their losses, especially their large mortgage and commercial real-estate losses. Credit Suisse reports that the Spanish "housing market appears to be more than 30% overvalued," and "there is a risk [that] reported NPLs [non-performing loans] might be underestimated to the order of 30-40%," and might be hidden by mortgage and loan restructurings.

On these restructurings, UBS analyst Alastair Ryan had reported in August-September, 2009, that 5.6 billion euros of Spanish mortgages were being restructured (renegotiated) per MONTH, but were not being reported as non-performing loans. He said that reported non-performing loans had totalled about 85 billion euros over the previous twelve months, but restructurings (which were excluded), were close to 50 billion total over the same period. For this and other reasons, Ryan estimated that reported NPLs were only half the true level.

An August, 2009, report from alternative economic research house Variant Perception was more straightforward on the "Ponzi scheme." It said, "Spain had the mother of all housing bubbles. To put things in perspective, Spain now has as many unsold homes as the US, even though the US is about six times bigger. Spain is roughly 10% of the EU GDP, yet it accounted for 30% of all new homes built since 2000 in the EU.

"The value of outstanding loans to Spanish developers has gone from just 33.5 billion euros in 2000, to 318 billion in 2008, a rise of 850% in five years. If you add in construction sector debts, the overall value of outstanding loans to developers and construction companies rises to 470 billion euros. That's almost 50% of Spanish GDP. Most of these loans will go bad. [Ed. note: By early 2010, home-mortgage debt was another 58% of Spanish GDP on top of this.]

"Spanish banks are hiding their losses and rolling over debt to zombie companies,... and making 40-year and 100% loan-to-value loans.... Investors are deluding themselves if they believe that Spanish banks are among the strongest in the world.

"In April, meanwhile, Spain's 'Expansion' reported that Spanish banks control 25 per cent of appraisals directly and another 25 per cent indirectly through their shareholdings. Which means they are mostly in charge of valuing the assets themselves. As Expansion reported, 'This situation has placed the focus once again on the links between banks and the real estate appraisers that goes beyond in many cases a mere commercial relationship.'"

And finally, and most alarming as to the real dimensions of this enormous Ponzi scheme, "Spanish banks are now the largest real estate holders in Spain. They have come to own properties through many different avenues. In order to hide from the effects of the real estate crash, Spanish banks have been buying properties before the loans on them go bad, and trying to dispose of them through their own real estate companies. They have also come to own dozens of thousands of homes through debt-for-equity swaps. Estimates put the value of property repossessed or swapped for debt by Spanish banks at about 16 billion euros. Consider the following: Spanish banks are now running their own real estate companies, and have websites set up to move their stock. Among selling points are: pricing discounts of 25-50%, financial terms of Euribor plus 0% over 40 years, and guarantees to re-purchase the property in the future."

LaRouche: It Doesn't Take a Lot of Imagination

February 19, 2010 (LPAC)—After Lyndon LaRouche identified the fact that the crisis in the Eurozone is not centered in Greece, but rather in Spain, as evidenced by the fake assets of the UK's own Banco Santander, the focus has now shifted to Spain as Europe's "weak link." As LaRouche said yesterday, it does not take a lot of imagination to figure this out.

The current issue of Business Week runs an article by Sean O'Grady entitled: "Euro Zone Fears Spread to Spain, Though its finances are in better shape than Greece's, there's growing nervousness in Europe that Spain could be the next weak link in the euro zone."

O'Grady writes: "The fear is that the next member of the so-called 'PIIGS'—Portugal, Ireland, Italy, Greece and Spain—to suffer a crisis of confidence will be Spain. And yet fears are growing that, even though the Greek crisis is far from resolved, Spain could be the next 'weak link' as the Greek Prime Minister, George Papandreou, described it a few weeks ago. Now the Spanish Prime Minister, Jose Zapatero, has virtually admitted as much is happening to him, blaming 'speculators' for Spain's travails. Spain's annual budget deficit, like the UK's and Greece's, has spiraled well into double figures—at almost 12 percent of GDP it rivals Greece's Olympian disregard for the old Maastricht treaty rules of prudence. And the markets are worried. The problem is size." Even the incompetent Paul Krugman is quoted by O'Grady as saying: 'In economic terms the heart of the crisis is in Spain, which is much bigger.'

Financial Times author, Walter Muenchau, has also caught on, belatedly, in an article entitled: "Why I worry more about Spain than Greece." After pointing out that the European Union now has a bailout rule, which is that a country can be bailed out if it agrees to brutal austerity conditions, Muenchau asks, "What if the country did not, or could not, comply with the conditions?"

While stupidly arguing that the crisis may be five years away, when it is actually today, Muenchau continues: "Greece will almost certainly not be that country, but Spain just might.... Now what would happen if our new bailout-rule meets a Spanish crisis, say in five years time? I would bet that whoever will be Spanish prime minister then will respond with a rude finger sign, walk out of the meeting, travel home, and declare with pride that Spain would not accept such an extreme loss of sovereignty. Better to perish than to be subjected to a hostile foreign rule. The next day he would declare a moratorium on the country's debt. What then? Germany may be reluctant to bail out Greece for all sorts of reasons. But Germany will do it. But Germany cannot conceivably bail out Spain. Germany and France together cannot bail out Spain. Spain is too large. And Spain is guaranteed not to be nearly so compliant as Greece.

Dubai Police Chief Calls For Arrest of Mossad Head

February 19, 2010 (LPAC)—On Thursday, Dubai's police chief, Lt. Gen. Dahi Khalfan Tamim called for Interpol to issue a red notice against the head of the Mossad as a killer, in case the Mossad is proved to be behind the murder of Hamas commander Mahmoud al-Mabhouh. Tamim told the English-language Abu Dhabi-based newspaper The National that Interpol had issued red notices for 11 suspects wanted in the killing of al-Mabhouh, 50, who was found dead in his hotel room Jan. 20. A red notice requests that the suspects be arrested pending extradition.

Two suspects, both Palestinians, are already in Dubai custody and were identified Thursday by a Hamas spokesman and an Israeli newspaper as operatives for the Palestinian political group Fatah. "Our investigations reveal that Mossad is involved in the murder of al-Mabhouh," Tamim told the newspaper. "It is 99% if not 100% [certain] that Mossad is standing behind the murder." The Israeli newspaper Haaretz has identified the two Palestinian suspects as former Gaza residents working for a company owned by a top confidant to the leader of Fatah, the Palestinian faction run by Palestinian Authority president Mahmoud Abbas. Ha'aretz described them as Ahmad Hasnin, a Palestinian intelligence operative, and Anwar Shekhaiber, an employee of the Palestinian Authority in Ramallah. The pair were arrested in Amman and extradited to Dubai after the killing.

Hamas spokesman Sami Abu Suhri told the BBC the men were members of the Palestinian Authority's security apparatus. They were originally from Gaza, he said, but fled the Strip three years ago when Hamas took over the territory.

On the other hand, Palestinian Authority police spokesman General Adnan al-Dameeri played down Hamas's accusations that the two Palestinians who have been arrested in Dubai were working for the Palestinian Authority security forces.

Al-Dameeri told Asharq Al-Awsat, "We have complete information about their identities, and I say to you, they work for the security apparatus of Hamas, and one of them who holds the rank of major traveled to work in Sharjah [in the UAE]; as for how he obtained this rank and why he traveled to Sharjah, it is up to Hamas to answer." General al-Dameeri also said that he "challenges them [Hamas] to declare their names," and he called on the Hamas leadership to "draw lessons from this incident."

Other details have emerged in the case: The Guardian learned that a key Hamas security official is under arrest in Syria on suspicion of having helped the assassins identify Mabhouh as their target. Authorities in Vienna have begun an investigation into whether Austria was used as a logistical hub for the operation. Seven of the mobile phones used by the killers had Austrian sim cards.

Two MI6 Agents In Dehli Detained.

February 18, 2010 (LPAC) — The Indian Intelligence Bureau (IB) has detained two British nationals, Stephen Hampston and Steve Martin, in New Delhi's Radisson Hotel following reports of their suspicious activities. Following questioning, the Indian intelligence officials found them carrying a map of the Indira Gandhi International Airport (Delhi's international airport) and sophisticated equipment that could track aircraft, including military planes. "The equipment, which is believed to have the capacity to track an aircraft [from] around 100 kilometres away, is being examined by experts," the news agency quoted an unnamed senior police official as saying. "They checked into the hotel on February 13 and hotel authorities informed us after they found their activities suspicious. We are questioning them," a police officer said.

Delhi was on high alert since the Pune bombing last week, where two bombs were thrown at the German Bakery. The bombs killed 9 people and injured at least 40.

The British intelligence activity has been hastened up following a decision by Islamabad and New Delhi to hold talks on Feb. 25. The MI6 agents and the Pune bombers were trying to create major incidents which would put the suspicion on Islamabad cancelling the talks.

For decades now, Britain is in the forefront in keeping India and Pakistan at eachother's throats by creating violent incidents. MI6-run British Muslims and the Britain-headquartered terrorist groups, such as the Hizbut Tahrir and the international terrorist group, Lashkar-e-Taiba (LeT) were used to undermine both India's and Pakistan's security. LeT was directly involved in the 2008 November attack in Mumbai.

Spain is Blowing Up, with Santander Right in the Middle of It

February 17, 2010 (LPAC)—While attention focuses on Greece, the financial system of the real sick man of Europe, the British outpost Spain, is blowing up, just as Lyndon LaRouche has pointedly been insisting.

Today, even as Economics and Finance Minister Elena Salgado lied that the Spanish government had not used, and never would use, derivatives to cover up its debt as Greece had, Spanish daily ABC revealed that the government has been hiding an astounding 21% of the country's public debt, because it does not include the debt and liabilities of public sector companies in the official statistics. Add those government obligations in, as a study by the opposition Popular Party did, and Spain's public debt increases by 200 billion Euro ($275 billion), to total 700 billion Euro ($962 billion), or 65% of GNP, as opposed to the government's claim of 47%.

That's just the public debt. The Spanish corporate sector is another bubble, a Wall Street Journal posting reported on Monday. According to the Journal, while Spain makes up 10% of the Euro-zone economy, Spanish companies accounted for more than a quarter of the increase in corporate debt in the Euro zone as a whole between 1999 and 2008. And that doesn't include the 27.7 billion euros in liquidity injections (i.e., debt) Spanish banks took from the European Central Bank between mid-2008 and late 2009, as reported in EIR's explosive Feb. 12 study, "The "Santander Syndrome:" London's Sucker Game."

As for Spain's "Ponzi scheme housing market," as UBS termed it in a note to investors on Monday: by the Wall Street Journal's calculation, household mortgage debt stands at 58% of GNP in Spain (as compared to 36% in France, and 37% in Germany)—and that, in turn, does not include the $450 billion "real estate developer" debt bubble which is blowing up, as rates of loan defaults in Spain, which tripled between July 2007 and March 2009, continue to increase. Germany's Handelsblatt and Spiegel Online warned today of the great danger of Spain's real estate sector coming down, with altogether EU300 billion in debt, much of which is held by banks as real estate collateral for loans made to clients. The loans not being repaid, and the banks have a big problem to handle. For example, Spain's number one bank, British front Banco Santander, alone, is sitting on EU5 billion of such collateral, they report.

The government is already racing to bail out the savings banks ("cajas"), which hold over half of the assets in the whole financial system—and have some 70% of their loans in real estate. The government set up a "Fund for Ordered Bank Restructuring" (FROB) last June to finance the consolidation and restructuring of the savings bank sector. Finance Minister Salgado insisted again today that this restructuring must be completed, "ASAP... to consolidate a more solid financial system."

Spain's oligarchic, tourism- and services-based economy is disintegrating under these bubbles. INE, the official statistical agency, today reported that services, making up more than 60% of the economy, fell by 13.6% in 2009, while industry, making up 12% of GNP, fell 21.7% in 2009. Yesterday, the Labor Ministry released a study advising that nearly 40% of the unemployed in Spain — and 19.5% of the workforce is officially unemployed — have very low chances of getting a new job, with unemployed industrial workers the worst off.

Thus, should it come as a surprise, that today BNP Paribas sold off 20% of its share holdings (from 3.12% to 2.49% of the total) in Banco Santander, the British-Spanish bank which Lyndon LaRouche has been warning is, in a word, bankrupt.

THE OCTOPUS KNOWN AS BANCO SANTANDER.

British Housing Collapse on the Way

February 17, 2010 (LPAC) — The Daily Telegraph reports that, by next January, mortgage lenders will have to start paying 319 billion pounds borrowed from the government during the original crisis of 2007 — a quarter of the U.K.'s entire 1.3-trillion-pound stock of mortgages. This, at a time when mortgage lending and the raising of funds by mortgage lenders has collapsed. Mortgage approvals have fallen from an average of 3.4 million annually during the reckless years between 2005-2007, to 1.3 million. While lenders were able to raise 130 billion pounds in the 12 months prior to the credit crunch, they raised just 11.5 billion in the last two years!

Mortgage lenders do not have access to the almost free money the Bank of England gives to British banks, so, this most likely will have to come from the government, again, which has obvious consequences for the government's budget deficit.

It looks like there's one more leak on the Titanic.

Giuliano Amato Pushes for a European Monetary Fund To Bail Out Euro

February 16, 2010 (LPAC)—"Mr. Lisbon Treaty" Giuliano Amato calls for a European Monetary Fund today, in order to save the euro monetary system. In an interview with La Repubblica, Amato says that there are only two solutions to the crisis: "The first is a 'Bundesbankization' of Europe, because it will be Germany, the country most sensitive to payments, because it knows it shall finance the most massive ones, to take over quotas of fiscal sovereignty which Greece, in this case, shall give up." The second scenario is the creation of an International Monetary Fund-style European Monetary Fund. "The Fund could find money on the market by issuing those European bonds which Germany always rejected, considering them an indirect commitment. But when the alternative is a commitment which directly bears on your budget, an indirect commitment through eurobonds could be considered a better perspective."

Fabian socialist Amato, who recently became advisor to Deutsche Bank on "economic and political scenarios and on the evolution of regulations," says that Greece and Spain "have deserved a shock." He believes that "spreads have a useful function," and that London hitman Mario Draghi at the European Central Bank would be "the right man in the right place." He calls for a "future-oriented" industrial policy which cannot "rely on nuclear plants."

Another Fabian socialist, former Finance Minister Tommaso Padoa Schioppa, calls today for filling the gap between currency and state. The euro crisis is showing the weakness of a currency without state, Padoa Schioppa writes in an article in Corriere della Sera, entitled "Sovereignty in Transition," that "we begin to understand that the time has come for the 'euro state.'"

THE OCTOPUS KNOWN AS BANCO SANTANDER