May 29, 2010
NEW DELHI: Eight months after his arrest in the U.S., prospects look bright for Indian investigators to get access to David Coleman Headley (49), an American citizen of partial Pakistani descent who allegedly helped the Lashkar-e-Taiba plan and carry out the 26/11 Mumbai terror attacks.
A team of four investigators is likely to leave for the U.S. soon to question David Headley, official sources said. The Chicago-bound team will have three officers of the National Investigation Agency (NIA) and a law officer. It could get a chance to quiz David Headley next week. Sources said that some paper work of a legal nature was yet to be completed.
The sources said the team was being sent following a communication from the U.S. Justice Department that all officials concerned and Headley's lawyer would be available during the visit to facilitate access. However, the sources pointed out, it was not clear for how many hours or days the team would get direct access to Headley, lodged in a Chicago prison.
He was arrested in October last year and in March this year he pleaded guilty to a dozen federal terrorism charges, admitting that he had participated in planning the November 2008 attacks in Mumbai as well as later planning to attack a Danish newspaper.
India has been demanding direct access and Prime Minister Manmohan Singh told a national press conference last week that the highest authorities in the U.S. had promised to make it possible.
In pleading guilty to all the 12 counts brought against him in December 2009 and repeated in a subsequent indictment in January, Headley admitted that he attended training camps in Pakistan operated by the LeT, a designated terrorist organisation, on five separate occasions between 2002 and 2005. In late 2005, he received instructions from three members of the Lashkar to travel to India to conduct surveillance, which he did five times leading up to the Mumbai attacks three years later that killed 166 people, including six Americans and wounded hundreds more.
A written plea agreement containing a detailed recitation of Headley's participation in the foreign terrorism conspiracies was presented before a Federal Court in Chicago when he changed his plea to guilty. In the light of his past cooperation and expected future cooperation, the Attorney General has authorised the U.S. Attorney in Chicago not to seek the death penalty. He has also further agreed that he will fully and truthfully testify in any foreign judicial proceedings held in the United States by way of deposition, videoconferencing or letters rogatory.
On his links with Lashkar, it was alleged that after receiving instructions to travel to India to conduct surveillance, Headley changed his name from Daood Gilani to portray himself in India as an American who was neither Muslim nor Pakistani. In the early summer of 2006, Headley and two Lashkar members discussed opening an immigration office in Mumbai as a cover for his surveillance activities.
One of his accomplices, Tahawwur Rana, 49, also of Chicago, who was indicted in January on three counts, has pleaded not guilty and remains in federal custody while awaiting trial.
Will the new department be headed by Wendy Doniger of UChicago or William Dalrymple or Amartya Sen?
A vikalpa, since history is also included: why not Indian Ocean Studies?
Well, I suppose anything goes in Harvard Corporation with Mid-east or Infosys type funding.
Sanskrit Dept. To Change Name, in Pursuit of Interdisciplinary Work
By NOAH S. RAYMAN and ELYSSA A. L. SPITZER, CRIMSON STAFF WRITERS
Published: Thursday, May 27, 2010
The Department of Sanskrit and Indian Studie
s has laid out plans to adopt a more interdisciplinary focus as the renamed Department of South Asian Studies—a move, if approved, that professors hope would attract more concentrators and faculty affiliated with other departments.
If the proposal—discussed at a departmental meeting earlier this month—is approved by the Faculty of Arts and Sciences in the fall, the department will draw from other departments like anthropology, history, religion, folklore and mythology, music, and archeology to expand its current faculty from eight to 15 professors, according to Sanskrit Professor Michael E. J. Witzel.
The change would also allow the department—which had only three declared undergraduate concentrators this past year—to offer a wider range of courses under a single department and possibly specific tracks within the concentration in the future.
Given current financial constraints—FAS has yet to close at least a $35 million budget deficit—Witzel said that the department would likely wait to bring new hires from outside Harvard.
“These days, you cannot really ask for new positions,” Witzel said.
The change in departmental structure was initially slated to take place this spring, but details of the plan were not finalized in time for an official vote at this year’s final Faculty meeting, according to Witzel.
“It has been on the books for quite a while. It just needed the right definition and the right push at the right moment,” said Witzel, who joined the department in 1986 and served as chair in the early 1990s.
Witzel added that South Asia’s increasing global presence has prompted the department to reevaluate its academic focus on the region.
Offering over 70 ancient and modern languages, Harvard boasts one of the most comprehensive university language programs nationwide, but Witzel noted that his department’s language courses are currently limited to Sanskrit, Tamil, Thai, Urdu-Hindi, Nepali, and Tibetan.
“It is like Europe missing all the romance languages,” Witzel said. “There are big gaps in the programs.”
Professor of Comparative Religion and Indian Studies Diana L. Eck will serve as interim chair next academic year while current department chair Leonard van der Kuijp is on leave.
“Having a wider study of south Asia at Harvard is something that many generations—or at least one generation- have yearned for,” Eck said. “So we think this is a really positive development.”
The study of Sanskrit began at Harvard in 1872 when it was established as an elective for Latin studies. It was folded into the Department of Indo-Iranian Languages later in the decade and assumed its current name in 1951.
—Staff writer Noah S. Rayman can be reached at email@example.com.
—Staff writer Elyssa A.L. Spitzer can be reached at firstname.lastname@example.org.
Washington, May 29: External affairs minister S.M. Krishna will outline the next stage of Indo-US relations under the Obama administration when he addresses the 35th anniversary meeting of the US-India Business Council (USIBC) here on Wednesday.
Drawing on his experience as Karnataka chief minister in having turned Bangalore into "Asia's Silicon Valley", Krishna plans to underpin "innovation" as the sheet anchor of India's ties with America as bilateral relations between them enter a new phase, six months before US President Obama’s planned visit to New Delhi.
As part of preparations for the first "strategic dialogue" between the two countries next week, the US assistant secretary of state for South Asia, Robert Blake, said yesterday that plans on schedule for a global disease detection centre in India "has the potential to be one of the flagship science and technology ventures between the US and India, in which our joint researchers will be able to study and hopefully find cures for some of the major global pandemic diseases."
Obama is taking a personal interest in the inaugural strategic dialogue with India and will demonstrate his commitment to the process with a special gesture of meeting Krishna although he is not a head of state or government.
According to administration sources here, he plans to do this either by attending a reception for Krishna to be hosted by the US secretary of state Hillary Clinton on Thursday or by dropping in on Krishna's meeting with the US national security adviser, General James Jones in the White House complex earlier. Obama had a phone conversation with prime minister Manmohan Singh yesterday.
In his address to the USIBC, Krishna will stress innovation being already done in India by US companies like Honeywell and General Electric as well as by the large pool of Indian Americans engaged in scientific and other research in US, including its commercial sector.
The external affairs minister will point out that by pooling the resources available in both countries in this area, India and the US stand to benefit through mutual cooperation in the 21st century.
Such innovation outside its borders is crucial for America and its economy since the US is an ageing society demographically and needs to look at younger nations with a large talent pool in order to remain competitive in the long run.
After the outbreak of pandemics like swine flu, Sars and avian flu, the US has been keen to expand its domestic Center for Disease Control (CDC) globally by setting up facilities abroad to detect disease occurrences in association with countries which are willing to improve their own surveillance and reporting.
India was chosen last year to host the seventh such regional centre around the globe in what the CDC calls its "principal and most visible program for developing and strengthening global capacity to rapidly detect, accurately identify, and promptly contain emerging infectious disease and bioterrorist threats that occur internationally."
Foreign secretary Nirupama Rao will fly directly from Beijing at the end of president Pratibha Patil's visit to China and arrive here on Tuesday to revive structured foreign office consultations between the two sides which had become moribund despite the intensity of Indo-US engagement in recent years.
On Wednesday, she will have a whole day of consultations with her US counterpart, the US under secretary of state for political affairs, William Burns.
Burns returned from a flying visit to New Delhi a few days ago and wrote an unusual blog on the state department's website about India.
"The rise of India is important and positive for American interests. I can't think of a global challenge today that doesn't require Indian cooperation -- climate change, counterterrorism, international economic stability, nuclear nonproliferation, economic growth and the list goes on," Burns wrote as the Obama administration prepares the red carpet for Krishna, planning commision deputy chairman Montek Singh Ahluwalia, human resources development minister Kapil Sibal, the minister of state for science and technology, Prthviraj Chavan and a host of government secretaries.
So keen are the Americans to ensure that the strategic dialogue with India has no hiccups and creates the best atmospherics in the run up to Obama's visit that the administration has sent away Richard Holbrooke, the president's special envoy on Afghanistan and Pakistan, on a holiday and dropped broad hints that he should not even be in town from June 1 to 4 when the Indian delegation is here.
Afghanistan and Pakistan will form a crucial segment of the strategic dialogue, but there is no love lost between Indian officials and Holbrooke, whom New Delhi sees as Islamabad's cat's paw in the so-called Af-Pak policies of the Obama administration.
Equally, there is considerable curiosity on the American side about the significant absence from the strategic dialogue of the minister of state for environment, Jairam Ramesh, although climate change is a crucial component of next week's talks.
The official explanation for the minister's absence is that Ramesh is tying up his re-nomination to the Rajya Sabha, a process with potential slips, but he may have decided to lie low after his controversial remarks about Sino-Indian relations in Beijing recently.
The Americans have vivid memories of how Ramesh called a spade and spade about US hypocrisy on climate change during Clinton's visit to India last year and upset American sensibilities. Ramesh will be represented by the Secretary of the ministry of environment and forests, Vijai Sharma, at the dialogue.
Eighty persons were killed and over 120 others injured in two acts of terrorism directed against Ahmadi worshippers in two mosques belonging to their community in Lahore on May 28,2010. Among those killed were former sessions judge Ameer Ahmad Sheikh, the Amir of the Ahmadia community in Lahore Ejazul Haq, and Major General (retd) Nasir Ahmad.
2.Though the Ahmadis had been subjected in the past to persecution and atrocities by the Sunni extremists, these were the most brutal acts of terrorism directed against them since Pakistan was born in 1947. There had been worse acts of terrorism directed against the Shias, who are in a much larger number and much more influential politically and economically in the Pakistani society, but the Ahmadis, who are a marginalized community with no political or economic power, had been spared such acts of terrorism till now.
3. The two commando-style terrorist attacks were staged at the time of Friday prayers in the two Ahmadi mosques located in the Garhi Shahu and Model Town areas of Lahore. Since the Ahmadis are treated as non-Muslims in Pakistan because they do not recognize Prophet Mohammad as the only Prophet of Islam, their places of worship are not recognized as mosques.
4.These attacks have, therefore, been described by the Pakistani officials and media as attacks on places of worship and not mosques. The Ahmadis, who regard themselves as Muslims despite their reverence for the founder of their community as another Prophet, look upon their places of worship as mosques no different from other mosques. Thus, the two incidents were two more instances of brutal attacks by Sunni extremists on another group of Muslims worshipping in mosques. However, in Pakistan, to describe the Ahmadis as Muslims and their places of worship as mosques would be considered blasphemous. There are five million Ahmadis in Pakistan’s total population of about 180 million.
5. Seven heavily armed terrorists throwing hand-grenades into the packed gathering of worshippers and opening fire with assault rifles forced their way into the Garhi Shahu mosque. Two terrorists raided the Model Town mosque. While the worshippers in the Model Town mosque beat back the raiding terrorists before the police intervened, the worshippers in the Garhi Shahu mosque were kept hostage for nearly three hours by the terrorists before they were rescued by the security forces.
6. The security forces are reported to have captured two of the nine terrorists involved in the two attacks. Three allegedly blew themselves up and the remaining four were killed in the exchange of fire. According to the “Daily Times” of Lahore, the attackers also fired shots and hurled a hand grenade at a nearby mosque of Ahl-e-Hadees, adjacent to the City Law College.
7. A TV channel quoted the Punjab Law Minister Rana Sanaullah as saying that one of the captured terrorists belonged to Rahim Yar Khan district and used to be a student of a madrassa in Karachi and that the other terrorist captured is a Pashtun.
8. On March 8, a suicide bomber had rammed his car packed with explosives into a Federal Investigation Agency building in Lahore, killing 11 people. On March 12, two suicide bombers had attacked Pakistani Army vehicles in a military cantonment in the city, killing more than 50 people. There were no major terrorist incidents in Lahore in April.
9. A statement disseminated from London through the Internet on behalf of the international Ahmadiya community said: “The attacks are the culmination of years of un-policed persecution of the Ahmadiya Muslim Jamaat, which is a minority sect in Pakistan. In 1974 legislation was passed that declared Ahmadis to be ‘non-Muslim’ and in 1984 further legislation was passed in which the practice of the faith was outlawed. At regular intervals since then Ahmadis have been attacked but today’s attack is the most cruel and barbaric. All Ahmadis, who are based in 195 countries, are peace loving and tolerant people and yet they are continually targeted by extremist factions. During his Friday Sermon at 1pm today (May 28) the Head of the Ahmadiya Muslim Jamaat,His Holiness Hadhrat Mirza Masroor Ahmad, said: “Today two of our mosques in Lahore were attacked by extremists. At the moment we do not have full details of what has happened. It is clear though that a number of our Ahmadis have been killed and many others have been injured. These people had merely come to the mosques to offer their Friday prayers and yet became victims of a heinous terrorist attack. May God grant patience to the bereaved and elevate the status of those who have been martyred.”
10. A report disseminated from Lahore by the Associated Press said: “Ahmadis are reviled as heretics by mainstream Muslims for their belief that their sect’s founder was a savior foretold by the Quran, Islam’s holy book. The group has experienced years of state-sanctioned discrimination and occasional attacks by radical Sunni Muslims in Pakistan, but never before in such a large and coordinated fashion.” The AP report further said that before the attacks the suspect from Rahim Yar Khan had stayed at a center belonging to the Tableeghi Jamaat.
11.Geo TV reported that the Punjab province branch of the Pakistani Taliban had claimed responsibility, but the authenticity of the claim is yet to be established.
12.On April 17, 2010, “Dawn” of Karachi had reported an increase in kidnappings for ransom and murderous attacks on members of the Ahmadiya community in the industrial town of Faislabad in the Punjab. A member of the local Ahmadiya community had alleged that the Jamaat-ud-Dawa (JUD) headed by Prof.Hafiz Mohammad Sayeed, which is the political wing of the Lashkar-e-Toiba (LET), was responsible for these incidents and that the local police were not taking action against those involved. Faislabad is a stronghjold of the LET. Abu Zubaidah of Al Qaeda, now held in the Guantanamo Bay detention centre, was captured in 2002 from the house of an LET activist in Faislabad. The Ahmadis have been alleging that the JUD and some members of the Pakistan Muslim League (N) of Mr.Nawaz Sharif, former Prime Minister, have been acting in tandem in attacking the members of the community in Punjab. In this connection, they have named Syed Saqlain Shah, a member of the National Assembly, his uncle Syed Iqbal Shah, a former member of the Punjab Provincial Assembly, and Makhdoom Javed Hashmi, senior Vice-President of PML (N).
13. The LET, which is close to Pakistan’s Inter-Services Intelligence (ISI), never indulges in acts of terrorism in Pakistani territory. It is doubtful whether it would have carried out the terrorist attacks on the Ahmadis despite its past acts of atrocities and intimidation against them. A strong suspect is the Sunni extremist Lashkar-e-Jhangvi (LEJ), which has been involved in acts of terrorism in Pakistani territory for many years. Like the LET, it too is close to Al Qaeda and the Tehrik-e-Taliban Pakistan.
14. Two other suspects are the Jaish-e-Mohammad, whose leader Maulana Masood Azhar, had served for some years in the LEJ, and an organization mysteriously calling itself the Asian Tigers with no allusions to Islam or the Holy Koran, which looks upon the Ahmadis as American agents. The Asian Tigers were allegedly responsible for the recent kidnapping and execution of Sq.Leader Khalid Khawaja, a retired officer of the Pakistan Air Force, who had served for some years in the ISI. After his retirement, he used to hobnob with a number of jihadi terrorist groups, including Al Qaeda, the TTP, the JEM, the LET and the LEJ, and had come under suspicion in connection with the kidnapping and murder of Daniel Pearl, the US journalist in the beginning of 2002. The Asian Tigers had accused him of being an agent of the US and the Ahmadis. Not much is known about its origin and background. It is possible that the LET or Ilyas Kashmiri’s 313 Brigade also operate under the name Asian Tigers in order to avoid attracting the suspicion of the ISI and the US. (29-5-10)
( The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai, and Associate of the Chennai Centre For China Studies. E-mail: email@example.com )
By K. Santhosh
A few residents of a colony at Kuriachira here have devised a new way to keep their homes cool during summer. They use coconut pith as roof insulation, which lowers the temperature in the rooms.
At the initiative of C.D. Skaria, a medical representative, the Nehru Nagar Welfare Association has formed an expert committee to popularise this method among the residents and help them set up the insulation. ``A one-inch layer of coconut pith is laid over the roof. Water is sprinkled on the pith once a week. The pith holds water nine times its actual weight and is the cheapest natural thermal insulator,'' Mr. Skaria says.
CONTACT Mr.Skaria : 09495739288 (India)
The residents of the colony have bought pith from Kandassankadavu. ``Insulating a roof costs only Rs. 300,'' says James Cheeran, owner of Cheeran's Auto Agencies. P. Tharanath, former technical director of the All India Handloom Board, says the coconut pith insulation is a natural substitute for air-conditioning. ``Even as the sun beats down mercilessly, the temperature in my house is below 30 degrees centigrade. I don't run up huge electricity bills as I use fans less these days,'' he adds. Sunny George, former secretary of the Association, says the effect of the insulation is amazing. ``Believe it or not, the rooms are so cool at night that my kids use blankets,'' Mr. George says.
Mr. Skaria says coconut pith is odourless, and free from weeds, seeds and toxins. ``Its high lignin content (approximately 46 per cent) resists bacterial and fungal growth. It contains tannin and checks termite attack,'' he said.
T.V. Varghese, former deputy director of education, is all praise for coconut pith. ``After laying it over the roof for two or three years, you can use it as manure.'' Once the summer is over, the residents store the pith in gunny bags. ``I've tried out different ways to beat the heat, including white-washing the roof. Nothing has been as effective as coconut pith insulation,'' Mr. Skaria claims.
May 28, 2010
Even highly-skilled Kremlin spin doctors would have been hard-pressed to sell a product as nebulous as Russian nanotechnology to American venture capitalists, unless President Dmitry Medvedev pitched it himself. During a meeting with 22 heads of leading U.S. venture capital funds on Tuesday, president Medvedev said that he had invited them to discuss how to develop the nation’s innovation potential and ensure that investments into high-tech businesses flow in. But given the inchoate state of the high-tech business in Russia, is president Medvedev getting a little ahead of himself?
The venture capital market in Russia, Medvedev said, is underdeveloped. Efforts to grow domestic capital spending on scientific research and studies have fallen flat for lack of sufficient venture capital in the country. “About 20 funds are operating in Russia with a total capital of some $2 billion,” Medvedev said. “When compared to the venture capital available in the United States and many other countries, this is next to nothing.”
Those in attendance said they were impressed by the mixture of humility and self-confidence with which the president persuaded his guests to join in the onerous task of modernizing Russia. “He was very calm and collected, and seemed to have command of a lot of details,” said Anna Dvornikova, the president of the American Business Association of Russian-speaking professionals (AmBAR), one of the organizers of the meeting. “Delegates were also impressed with the way the president interacted with members, allowing each to speak while taking notes as they do. He displayed a thorough knowledge of all the issues discussed.”
The delegation comprised many big names on the U.S. venture capital market, which collectively manage more than $60 billion of funds in more than 6,000 high-tech companies. They include Accel Partners, Alloy Ventures, Almaz Capital Partners, Asset Management Company, Atlas Venture, August Capital, Bessemer Venture Partners, Canaan Partners, Domain Associates, Draper, Fisher & Jurvetson, EDVenture, Emergence Capital, Index Ventures, JK & B Capital, Mohr Davidow Ventures, Siguler Guff & Company, Sofinnova Ventures, Wellington Partners, as well as the well-known law firm of Wilson Sonsini Goodrich & Rosati.
The meeting was also attended by high-ranking state officials including the U.S. Presidential Aide Anthony Michael McFaul and Medvedev's First Deputy Chief of Staff Vladislav Surkov. The Minister of Economic Development Elvira Nabiullina and Ilya Lomakin-Rumyantsev, the head of the Russian Presidential Expert Department, were also present.
Venture capital slowed to a trickle in Russia last year, with investment falling by nearly 98 percent from 2008 as the financial crisis raged, drying up credit worldwide. The economy shrank 7.9 percent as oil prices plunged, scaring off many venture capital firms. According to data from the National Venture Capital Association, Venture capital firms, including those in the United States and Europe, invested only $18 million in Russian startups in 2009, compared with $771 million in 2008.
Nevertheless, experts and industry leaders, including some sitting down with president Medvedev on Tuesday, said that venture capital investment may be the least of Russia’s problems. The Russian president, they said, should retool his modernization package to skew it more toward improving Russia’s image tarnished by years of bad business practices. “Russia needs trust more than it needs funds,” Dvornikova said. “There is no doubt that Russia has the money but young and innovative entrepreneurs don’t always receive the type of support they need in order to take the forefront in modernizing the country.”
Stas Khirman, the founder and CTO of Khirman & Son LLC, said the image of Russia as hell rather than haven for foreign investors was for the most part wrongfully created by the media. “With Russia, good news is never news, while bad news always hits the headlines,” Khirman said. “We believe that by bringing in such a high-powered delegation to Russia to meet with officials at the highest level of government, including the president, we could remove some of this negative image.”
Andrew Somers, the president of the U.S. Chamber of Commerce in Russia, described the president’s latest effort to invite venture capital investment as “a kind of paradox,” adding that Russia has a couple of large nanotech funds – one headed by Rusnano Chief Anatoly Chubais and another by Russian Technologies' Chief Sergei Chemezov. “They have a lot of money,” Somers said. “What is needed here is a type of investor who is experienced in investing in high-tech projects with some risks. And the risks are: will the high-tech product be a commercial success and would there be a return on investment?”
Russia has many smart people, but they have almost no experience in investing in high-tech risk ventures where the return on investment is uncertain, Somers said. “That is why these guys from California, who have a special kind of experience in converting the results of research into a commercial application, came over here,” Somers said. “Russia lacks the experience of investing in projects like Skolkovo, where it is not certain whether a long period of research would eventually pay off or not.”
Esther Dyson, the founder of EDventure Holdings, said that what Russia needs most of all is to groom “entrepreneurs who are confident enough to start businesses, make mistakes, learn from their mistakes, and try again until they succeed.” Dyson, who also sits on the board of Yandex, Russia’s largest search company, sees high-tech companies as the nucleus of the country’s diversification and modernization efforts. “I believe that Russia's other sectors should become good ‘customers’ to the high-tech companies,” Dyson said. “That is, they should demand good products and services, delivered on time, which will make their own businesses more productive and competitive.”
“The innovations should serve useful purposes and deliver real benefits to the people of Russia. Then those people will support the private, innovative sector politically, and young Russians will be interested in getting an education and joining the modern economy,” Dyson said.
But by luring in venture capitalists at the formative stage, the country’s economic planners appeared to be jumping too far ahead, said Ron Lewin, the managing director of TerraLink. “What most projects in Russia need is not venture capital but angel investment, which requires smaller amounts and less strict investment conditions,” he said. Angel investors like Dyson, however, said that Russia would need both, along with “good customers and managers who can use innovation to get the full value out of the innovations funded by investors.”
Lewin said that in order to provide extra catalysts to jumpstart innovation in various sectors of the national economy, president Medvedev should reduce the high "country-risks" that Westerners attach to investment in Russia, and promote a culture of entrepreneurship by improving the regulatory environment. “Russia’s problems are not about capital as such, but about business environment and conditions,” he said.
While Russia is now more secure than, say, two years ago, industry leaders said that there are still serious concerns for Westerners wanting to invest in the modernization program in the country. "The biggest security threat is in the area of intellectual property," Somers said. “These investors would want to be sure that if they invest in innovation and research, that the ownership of the innovative products would belong to them and not be taken over by someone else." Dyson agreed: "Investors want to take business and technology risks, but they do not want to take security risks. An open, transparent market is key to attracting capital and also talent."
President Medvedev told his guests on Tuesday that, having himself been an entrepreneur at the age of 25, he understands a lot about grooming young entrepreneurs. He said that he would stake name and fame on creating a crop of young innovators that would keep the country’s economic engine humming. But can the president follow through on this? “We simply don't know,” Dvornikova said. “Our task is to open the door and let in fresh air.” The president could benefit from some fresh air, too.
by Helga Zepp-LaRouche
May 21—That is just what could happen, since neither the U.S. Senate, nor the German Bundestag, nor the G20 countries, have yet done anything to prevent it. On the contrary: The financial reform bill just passed by the U.S. Senate, which left the fattest loopholes for speculators, has increased the instability enormously. And the Bundestag's rubber-stamping of the €750 billion "rescue package" for Greece has accelerated the dynamic of disintegration of the global financial system—whether by a chain-reaction domino effect, or by global hyperinflation.
A taste of what could happen at any time, on a much larger scale, was shown by the collapse of the Dow Jones on May 6, when it fell by 10% in 16 minutes, wiping out $700 billion, with the automatic trading systems apparently on autopilot. The quick and partial rebound that occurred then, might not the next time, and the whole world financial system could actually disintegrate overnight. All it would take is another grave mistake, somewhere on the globe, and the world could plunge into chaos.
Only hours after the Senate passed the version of the financial reform bill demanded by the White House and top executives of Wall Street, a Newsweek blog compared the law to a doughnut, with a huge hole in the middle, "that is so critical to the success or failure of the bill that it becomes the legislation's defining characteristic"!
Newsweek's comment refers particularly to the fact that the amendment on controlling derivatives trading that Sen. Maria Cantwell (D-Wash.) had tried to bring to a vote, was blocked by Senate Majority Leader Harry Reid, as was the amendment that would have reintroduced the Glass-Steagall standard. Newsweek quoted a source who said that, in Cantwell's view, "the bill is a joke," because "the clearing of derivatives and exchange trading is the heart of the whole bill." And that's precisely what is missing.
As the result of this vote, the derivatives trade, which the American people rightly blame for the crisis, is not only not restricted, but the U.S. Senate has destroyed its credibility in this matter, once and for all. For in the preceding debate, many Senate Democrats, such as Byron Dorgan (N.D.), Jeff Merkley (Ore.), Barbara Mikulski (Md.), Tom Harkin (Iowa), among others, gave fiery speeches promising to support the amendments of Cantwell, McCain, and Feingold, for reintroduction of a split banking system, and of Blanche Lincoln (D-Ark.), for control of derivatives.
But the leading Wall Street banks' top lobbyists, who have decades of expertise in the manipulation of Congress, made sure, together with the White House, that those same Senators, who pledged support for the amendments, turned out to be full of hot air, voting on the first ballot to end debate, and then voting for the bill without the changes that would have ensured that the high-risk speculation would have been eliminated. Not even the watered-down "Volcker Rule" was voted up. Even the new Republican Senator from Massachusetts, Scott Brown, who was elected to office with support of the Tea Party movement, evidently had all the fight taken out of him. Washington sources report that there have never been such massive threats, manipulation, and money transfers, as in the days leading up to the vote.
What this means is that the credibility and influence of Lyndon LaRouche and his Political Action Committee have never been greater; they are seen as the only force that is not discredited, because before the vote, they launched a nationwide mobilization for restoring the Glass-Steagall Act and replacing the casino economy with a credit system. This mobilization will now continue, given the deplorable behavior of the Senate; Members of Congress, will face, what promises to be for them, the very unpleasant task of explaining to their angry constituents, during the upcoming Memorial Day holiday, why they capitulated to Wall Street, once again.
Merkel Breaks the Mold
However, certain relevant Washington circles responded respectfully to the German government of Chancellor Angela Merkel and the BaFin's banning of naked short sales of stocks and government bonds, as well as unsecured credit default swaps. The news of this action sent some hard-nosed bankers into a state of shock, since they never would have thought that Germany, of all countries, would act unilaterally—at least on this point—to prevent the German taxpayer from having to pay the consequences of these short sales. Meanwhile, in Austria, Belgium, Holland, Switzerland, and the Czech Republic, there are signs that they may be ready to follow suit.
Obviously, the German government, by adopting this measure, was taking revenge for the massive pressure that President Obama, British Prime Minister Gordon Brown, French President Nicolas Sarkozy, and EU Commission president José Manuel Barroso, had applied to Chancellor Merkel, who agreed to the EU750 billion rescue package, after long resisting it. The above-mentioned gentlemen were treading in the footsteps of Margaret Thatcher, François Mitterrand, and George H.W. Bush, who once pressured Chancellor Helmut Kohl, against his better judgment, to agree to the European Monetary Union—the euro-as the price for their acceptance of German reunification.
The Austrian daily Die Presse (May 15) spoke of a "monetary coup d'état," in which the European heads of state and finance ministers had decided on nothing less than a "genuine currency reform," which changed the euro into an inflation-prone soft currency, and made all EU members collectively responsible. By purchasing government bonds of bankrupt states, the European Central Bank (ECB) has lost all credibility, the article said.
The same can be confidently said about the German Bundestag and the Bundesrat, which gave the go-ahead on Friday, May 21, for the German share of the bailout package—around €150 billion—although the euro, completely unimpressed by the mega-package, had slipped from Monday through Thursday from 1.30, to sometimes as low as 1.22, against the dollar. The combination of the mega-bailout package, the ECB's massive easing of monetary policy, brutal austerity, and the European debt brake, means a disastrous combination of hyperinflation in the tradition of 1923 Weimar, plus Chancellor Heinrich Brüning's austerity policy of the beginning of the 1930s.
"Tagesthemen" TV news then reported on who was really profiting from the (probably unconstitutional) package—not the Greek population, which is going to have to tighten its belts, but, among others, Greece's richest banker, Spiro Latsis, whose Eurobank holds €12 billion in Greek government bonds, and aboard whose luxury yacht EU Commission president Barroso has spent his vacation several times.
Thus, we have the same problem as in previous votes, whether on the health reform (as leading Christian Democratic parliamentarian Friedrich Merz himself said), or on the Lisbon Treaty, which the Members of Parliament had obviously not read: that the parliamentarians have almost no idea about what they are voting on. At least Chancellor Merkel admitted that for her, and for politicians in general, it is difficult to figure out the complex processes in the financial markets, and disinterested advisors are hard to find in the financial sector. To say it a bit more clearly: The representatives of the financial interests lie through their teeth.
They depend upon people's short memories, just like Obama's economic advisor Larry Summers, who verbally welcomed the Wall Street-approved version of the U.S. financial reform, saying that if this law had been in effect, the crisis would never have occurred! Summers of all people, who was one of the key people responsible for abolishing Glass-Steagall in 1999! The hyperventilated speeches of the Greens and the Social Democratic Party in the Bundestag, however, were just as duplicitous; what the stony-faced Sigmar Gabriel (SPD) has apparently forgotten, is that it was the Red-Green coalition that introduced deregulation of the financial markets and True Sale International to Germany in 2004.
A Global Glass-Steagall Needed
Neither the €750 billion package nor the austerity and budget control measures designed by the European Union will stop the escalation of the systemic crisis; on the contrary, they are making the situation worse. Only a real reorganization of the world financial system, dealing with the problem at its root, will make it possible to overcome the systemic crisis.
The only real way out is the immediate introduction of a split global banking system—a global Glass-Steagall—protecting the commercial banks, and making loans available for industry, agriculture, and trade, while protecting the people's life savings. Anyone who wants to continue with high-risk gambling will do so at his own risk, and will no longer be able to count on the taxpayers' money to bail him out.
The "creative financial instruments" introduced by U.S. Federal Reserve Chairman Alan Greenspan in 1987—i.e., derivatives and securitization—are as little needed for a well-financed real economy as is currency speculation, which must be prohibited by fixed exchange rates. The current hopelessly bankrupt monetary system must be replaced by a credit system, in which long-term multilateral agreements are concluded among sovereign states, over two or more generations, investing in such future-oriented projects as infrastructure, the inherently safe high-temperature nuclear reactor, thermonuclear fusion, manned space flight, and other revolutionary technologies, to increase the productivity of the economy and lead to full, productive employment.
For the parties that are represented in the Bundestag, the current economic crisis is evidently too complex, since not one has rejected the EU package on a principled basis. Support the BüSo, the only party which has long predicted the crisis, which knows today how to overcome it, and which has the courage to call a spade a spade.
 The FDR-era Glass-Steagall Bill, repealed in 1999, erected a "firewall" between investment banking and commercial banking.
 Germany's financial regulatory agency.
 Social Democratic-Green.
 This was the legislation that allowed hedge funds and private equity funds to operate.
by John Hoefle
READ PDF VERSION
May 22—The death of the Glass-Steagall regulatory safeguard in 1999 was a disaster, not only for the United States, but also for the rest of the world. This vital restriction on speculative activities, put through in 1933, though weakened significantly over the years by deregulation zealots, remained a major legal impediment, until its final demise at the hands of the ill-conceived and corrupt Gramm-Leach-Bliley Act of 1999.
Freed from the prohibition against mixing commercial banking and investment banking, the largest U.S. banks turned more and more to Wall Street speculation. To "make money" the fastest and the mostest, they abandoned investment in the physical economy, especially those substantial projects which require decades to "pay off," not only for them, but for the population as a whole. They turned increasingly toward using their depositors' money to fund gambling sprees in the global casino, using their growing power to manipulate markets, looting both their own customers, and the rest of society. They became the personification of greed; and that greed, unchecked by regulatory safeguards, destroyed our economy.
Much of this can be laid at the feet of the Anglo-Dutch Liberal system, which dominates the international financial system from its headquarters in the City of London. Wall Street and the big U.S. banks, be they in New York, North Carolina, or California, are creatures of this global system, and their nefarious activities can only be understood in this regard. They are more British than American, in method and aims.
However richly the Brutish Empire deserves the blame for the disaster which has enveloped the world, the American people and their government bear the ultimate responsibility for what has happened here. Under our Constitution, it is the duty of the Federal government to protect the nation from predators, and it is the duty of the citizenry to make sure that governments, at all levels, meet their responsibilities. If our people had not allowed themselves to be corrupted, we would not have elected such fools as Phil Gramm, Chris Dodd, Barney Frank, and Nancy Pelosi to represent us in Congress, nor would we have tolerated such creatures as Sir Alan Greenspan and Ben Bernanke running our monetary affairs.
The tide is turning, however. We, the people, have awakened from our stupor and are demanding that our government reverse decades of failed policies. The battle to restore Glass-Steagall is exemplary of this process. The battle has been joined, and the possibility of victory is on the horizon.
As recent events in the Senate show, the need to restore Glass-Steagall and to reign in derivatives has now become part of the national debate—a debate we will win. Let the bankers and their flunkies howl—it's a sign we're doing the right thing. Stick to your principles, and do not compromise. We demand a return to Glass-Steagall and the complete elimination of derivatives, and we will prevail.
The repeal of Glass-Steagall a decade ago has led to a dramatic consolidation among the top banks, as well as to a dramatic increase in derivatives. There are now basically four super-banks which dominate lending in the United States, in what amounts to a financial cartel (though one should never forget that they are inseparably connected to the London headquarters of the monetarist system). As a cartel, the four mega-banks make their money by trading, not investment, and could care less about the growth of living standards and physical economy—as long as the loot keeps flowing in.
Since the repeal, the assets of the top four U.S. banks have soared (Figure 1). Today, the four banks—Bank of America, JP Morgan Chase, Citigroup, and Wells Fargo—have a combined $7.7 trillion in assets, more than ten times their assets in 1995. That's not surprising, since they are not really the same banks they were back then.
Citigroup is a good example: Back in 1995, it was known as Citicorp, but in 1998, it agreed to a merger with Travelers Corp., an insurance company which owned Salomon Smith Barney, an investment bank. The merger was blatantly illegal under Glass-Steagall, since it would combine a commercial bank with an investment bank. In fact, the announcement of the merger was itself a violation of Federal conspiracy statutes, since it represented the two parties stating an intent to break the law. But rather than enforce the law, the Federal government fell all over itself to change the law to accommodate the bankers. The merger went through, and Citicorp became Citigroup.
The bank known today as JP Morgan Chase is another product of mergers. In 2000, Chase Manhattan bought JP Morgan, creating JP Morgan Chase, and since then, the bank has gobbled up Bank One, Bear Stearns, and Washington Mutual, producing a $2 trillion-in-assets, derivatives-laden monstrosity. Bank One had been one of the so-called super-regional banks, and a product of a string of mergers.
Bank of America was known as Nationsbank until 1998, when the North Carolina super-regional bought California-based Bank of America, and adopted its victim's more prominent name. Both banks had engaged in a series of mergers, and the combination bank continued that tradition, notably, with the acquisitions of Fleet Boston in 2004, and Countrywide and Merrill Lynch in 2008.
The fourth of our giant banks, Wells Fargo, was known as Norwest until 1998, when it bought Wells Fargo and kept its historic name. Wells Fargo increased its size significantly in 2008, with the acquisition of Wachovia, the North Carolina giant formerly known as First Union.
The result of this merger frenzy is a dangerous concentration of banking in an ever-shrinking number of banks. The big four banks now control almost 40% of all the deposits in the U.S. banking system (Figure 2). Bank of America and JP Morgan Chase each hold more than 10% of the nation's deposits, a level that used to be illegal.
These four banks now account for half the mortgage loans, and two-thirds of the credit cards, issued in the United States. But the mortgages are really an aspect of the ongoing Federal bailout of the banking system, since the government guarantees these loans, allowing the banks to reap the benefits without taking the risks.
The ten largest banks now control nearly half of the nation's deposits, leaving the rest of the deposits distributed among the remaining 8,000 banks and thrifts. Given the carnage among those smaller banks, this concentration will only increase.
That "top ten" concentration is even worse than it appears, given the way in which investment banks, insurance companies, and others have been allowed to become bank holding companies since 2008. Not only does the U.S. "top ten" include Goldman Sachs and Morgan Stanley, but it also includes MetLife! What's next, Wal-Mart? The group also notably includes the U.S. arms of two British banks, HSBC and Barclays; and Taunus, the former Bankers Trust now owned by Deutsche Bank (Table 1). This list is evidence of how far we have strayed from Glass-Steagall, and why it must be reinstated.
With this banking consolidation has also come a rapid increase in the level of derivatives in the U.S. banking system. The numbers are staggering, with $294 trillion in derivatives at U.S. banks at the end of 2009, according to the Office of the Comptroller of the Currency (Figure 3). The reported figures, we must add, significantly understate the actual level of derivatives in the system. But even the reported numbers are sufficiently large to make the point.
This derivatives exposure is concentrated in just a handful of bank holding companies (Table 2). The majority of these derivatives are located inside the commercial banking units of these holding companies. JP Morgan Chase Bank, for example, has $78.5 trillion of derivatives, while Citibank holds $37.5 trillion. The situation is slightly different at Bank of America, which acquired the derivatives exposure of Merrill Lynch; Bank of America has $44 trillion of its $71 trillion in derivatives inside the bank. Goldman Sachs Bank, with $91 billion in assets, has over $41 trillion derivatives, or $457 in derivatives for every dollar of assets! It is clear that these are neither banks anymore, nor are they safe.
It cannot be stressed enough, that the financial crisis which began so publicly in 2007 and continues today, is a derivatives crisis. Terms like "subprime crisis," "credit crunch," and "sovereign default crisis," are really just euphemisms intended to hide the blowout of the derivatives market, and the way that the bailouts have been intended to protect those derivatives.
The solution to the derivatives crisis begins with a simple step: pass a law declaring all existing derivatives contracts null and void, and outlawing any further derivatives. That neatly outflanks all the discussion about closing "loopholes" and moving derivatives to exchanges. We don't need derivatives, they perform no useful function, and so rather than trying to control them through regulation, we simply forbid them.
We've Only Begun
The Obama Administration and the traitors in the U.S. Senate pulled every trick they had to defeat the attempt to put the Cantwell-McCain Glass-Steagall amendment into the banking reform bill, and also gutted the more modest efforts to restrict derivatives. But the power of their parliamentary tricks pales in comparison to the growing swell of public disgust with their actions, and the relentless march of the financial crisis.
That the derivatives crisis is far from over was demonstrated yet again, by the Federal Reserve's participation in the European bailout. The Fed's role in this bailout, at least as publicly revealed, is to flood Europe with dollars. Given that most derivatives contracts are settled in dollars, and that the ability to cancel, restructure, or settle derivatives contracts is of mortal importance to the banks and other speculators, the Fed's currency swap lines are a giveaway to the nature of the crisis.
The problem with repaying existing debts is real, and by themselves, the debts are enough to blow out the system, but the enormous weight of all the derivatives leveraged upon those debts is what has the British financial cartel terrified. The combined reimposition of Glass-Steagall, and the elimination of the derivatives market, would blow the Brutish Empire's global monetary system out of the water, and provide the precondition for reorganizing the world around the American System of physical economy.
The problems for the British and their puppets in the U.S. are getting worse by the day. They are extremely vulnerable, and ripe for political defeat. Our job is to weaken them at every turn, while organizing our fellow patriots, here and abroad, around the necessary solution. We have the winning hand—our power grows and the enemy's power declines with every passing day. This is the time to turn it on, to show those Brutish fools what America really is. It is time for victory.
Mérida, May 28th 2010 (Venezuelanalysis.com) – Venezuela and Italy gave a jumpstart to joint railway construction projects in the South American country on Thursday with the signing of a series of cooperation accords.
During an official meeting in the Miraflores presidential palace, the Venezuelan Ministry for Housing and Public Works and the Italian Ministry for Infrastructure and Transportation signed a document to “express their commitment to honor previously contracted obligations.”
Another agreement was signed to provide education and technological training to “the communities adjacent to the railway lines of the national railway plan,” according to the Venezuelan Information Ministry.
“Italian companies have helped us so very much in the area of railways, and we want them to continue helping us,” President Hugo Chavez said as he addressed the Italian delegation. He said Venezuela is willing to increase its supply of oil and natural gas to Italy.
The Contuy Medio Consortium, made up of Italian, Venezuelan, and Japanese firms, has been in charge of railway construction including lines to connect Venezuela’s La Encrucijada and Valles del Tuy regions, as well as Caracas and the port city Puerto Cabello, since 1996.
The projects have stalled in recent years as the result of a lack of financing, according to local news reports.
Last Sunday, Chavez said he will not accept the stalling of the projects any longer, and demanded that the Italian companies look for financing independent of the Venezuelan government.
“Those companies have the means to seek financing, and they must do it; they can’t put the whole burden on the national budget [of Venezuela],” Chavez said during his weekly talk show, “Aló, Presidente”.
Chavez also called on Italian Prime Minister Silvio Berlusconi to help the seek financing for the projects. Italian Ambassador Luigi Maccotta, who was in the audience during the show along with officials from the Italian firms, promised to speak with Berlusconi on the subject.
During Thursday’s binational meeting, Italian Foreign Minister Franco Frattini delivered a letter to Chavez from Berlusconi in which the prime minister extended an offer to seek “innovative mechanisms of financing.”
Chavez said he received the letter “with affection, hope, and appreciation,” and expressed his willingness to seek “new horizons in cooperation.”
The president emphasized that it is necessary to construct a “new international order” in response to the world economic downturn sparked by the 2008 financial crisis. “All crises bring opportunity and obligate us to take action,” said Chavez.
Venezuela plans to construct 13,665 kilometers of train line with the capacity to transport 240 million people per year between the country’s major cities by 2030. Railway construction has been revived during Chavez’s two terms as president, following a 70-year standstill.
In other accords signed on Thursday, the health ministries of both countries signed an agreement to cooperate in the fields of oncology, hematology, and pediatrics for low-income populations, and the higher education ministries moved forward on plans for university student exchanges and research cooperation.
Also, the Hydrological Institute of Venezuela signed an agreement with officials from the island of Cerdeña, a region of Italy, to “promote the development of research aimed at the betterment of the management of water resources, by way of training, storage, treatment, quality control, transference and distribution.”
Last year, the Italian firm ENI signed a contract with the Venezuelan state oil company, PDVSA, to develop a section of Venezuela’s vast oil reserve along the Orinoco River.
Eric Helleiner, May 2010
The 2007-2008 global financial crisis encouraged speculation about the prospects for a 'Bretton Woods moment' in which the global financial system would be radically redesigned. Many of those hoping for this outcome have since become disillusioned with the limited nature of the international financial reform agenda. But the success and innovation of the Bretton Woods conference was made possible by unique political conditions that are not present today, notably concentrated power in the state system; a transnational expert consensus; and wartime conditions. Moreover, a close reading of history reveals that the Bretton Woods system did not emerge from a single moment but rather from a much more extended historical process. If a new international financial system is being born today, it will be a slower and more incremental development process.
The crisis of 2007-2008 has already intensified twin legitimacy crises relating to international financial policy and leadership. It has also generated an international reform initiative that has been unusual for its speed and internationally coordinated nature. Many of the details of this reform initiative remain unresolved and its content and breadth are hotly contested in various ways. We thus find ourselves in more of an interregnum than a constitutive phase. It remains unclear how quickly, if at all, the latter might emerge and in what form.
Chatham House, London
Professor Joseph Nye, University Distinguished Service Professor, John F Kennedy School of Government, Harvard University
Chair: Sir Paul Judge, Senior Adviser, Chatham House
On 9 May 1950 French Foreign Minister Robert Schuman made a visionary proposal, which set Europe on the
path to what has now become the European Union. The Schuman Declaration made it clear that Europe
needed "the preservation of peace". Sixty years later the world has changed and the old continent is facing
new challenges. The EPC offers these thoughts on what Schuman might say today.
06 May 2010
On the 60th anniversary of the Schuman Declaration (9 May 1950), which set Europe on the path to European economic and political integration, the EPC has drafted a new declaration along lines that Schuman might have thought of. This proposes a new vision to reverse the EU’s political and economic decline and give it a renewed sense of purpose. It suggests two measures to deal with internal and external challenges: one to enhance Europe’s global role by leading the reform of global institutions, such as the UN or IMF; and the other to strengthen economic governance by establishing a European Economic Government and a fully-functioning Economic Union.Click here