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MIKE WHITNEY: The CIA’s Killing Spree in Lahore

February 24, 2011 Comments off

The following column is reprinted with permission from Mike Whitney.
 

The CIA’s Killing Spree in Lahore
©  Mike Whitney
February 24, 2011

*  The Case Against Raymond Davis

When CIA-agent Raymond Davis gunned down two Pakistani civilians in broad daylight on a crowded street in Lahore, he probably never imagined that the entire Washington establishment would spring to his defense. But that’s precisely what happened. Barack Obama, Hillary Clinton, Mike Mullen, John Kerry, Leon Panetta and a number of other U.S. bigwigs have all made appeals on Davis’s behalf. None of these stalwart defenders of “the rule of law” have shown a speck of interest in justice for the victims or of even allowing the investigation to go forward so they could know what really happened. Oh, no. What Clinton and the rest want, is to see their man Davis packed onto the next plane to Langley so he can play shoot-’em-up someplace else in the world.

Does Clinton know that after Davis shot his victims 5 times in the back, he calmly strode back to his car, grabbed his camera, and photographed the dead bodies? Does she know that the two so-called “diplomats” who came to his rescue in a Land Rover (which killed a passerby) have been secretly spirited out of the country so they won’t have to appear in court? Does she know that the families of the victims are now being threatened and attacked to keep them from testifying against Davis? Here’s a clip from Thursday’s edition of The Nation:

Three armed men forcibly gave poisonous pills to Muhammad Sarwar, the uncle of Shumaila Kanwal, the widow of Fahim shot dead by Raymond Davis, after barging into his house in Rasool Nagar, Chak Jhumra.

Sarwar was rushed to Allied Hospital in critical condition where doctors were trying to save his life till early Thursday morning. The brother of Muhammad Sarwar told The Nation that three armed men forced their entry into the house after breaking the windowpane of one of the rooms. When they broke the glass, Muhammad Sarwar came out. The outlaws started beating him up.

The other family members, including women and children, coming out for his rescue, were taken hostage and beaten up. The three outlaws then took everyone hostage at gunpoint and forced poisonous pills down Sarwar’s throat.” (“Shumaila’s uncle forced to take poisonous pills”, The Nation)

Good show, Hillary. We’re all about the rule of law in the good old USA.

But why all the intrigue and arm-twisting? Why has the State Department invoked the Vienna Convention on Diplomatic Relations to make its case that Davis is entitled to diplomatic immunity? If Davis is innocent, then he has nothing to worry about, right? Why not let the trial go forward and stop reinforcing the widely-held belief that Davis is a vital cog in the U.S.’s clandestine operations in Pakistan?

The truth is that Davis had been photographing sensitive installations and madrassas for some time, the kind of intelligence gathering that spies do when scouting-out prospective targets. Also, he’d been in close contact with members of terrorist organizations, which suggests a link between the CIA and terrorist incidents in Pakistan. Here’s an excerpt from Wednesday’s The Express Tribune:

His cell phone has revealed contacts with two ancillaries of al Qaeda in Pakistan, Tehreek-e-Taliban of Pakistan (TTP) and sectarian Lashkar-e-Jhangvi (LeJ), which has led to the public conclusion that he was behind terrorism committed against Pakistan’s security personnel and its people… This will strike people as America in cahoots with the Taliban and al Qaeda against the state of Pakistan targeting, as one official opined, Pakistan’s nuclear installations.” (“Raymond Davis: The plot thickens”, The Express Tribune)

“Al Qaeda”? The CIA is working with “ancillaries of al Qaeda in Pakistan”? No wonder the U.S. media has been keeping a wrap on this story for so long.

Naturally, most Pakistanis now believe that the U.S. is colluding with terrorists to spread instability, weaken the state, and increase its power in the region. But isn’t that America’s M.O. everywhere?

Also, many people noticed that U.S. drone attacks suddenly stopped as soon as Davis was arrested. Was that a coincidence? Not likely. Davis was probably getting coordinates from his new buddies in the tribal hinterland and then passing them along to the Pentagon. The drone bombings are extremely unpopular in Pakistan. More then 1400 people have been killed since August 2008, and most of them have been civilians.

And, there’s more. This is from (Pakistan’s) The Nation:

A local lawyer has moved a petition in the court of Additional District and Sessions… contending that the accused (Davis)… was preparing a map of sensitive places in Pakistan through the GPS system installed in his car. He added that mobile phone sims, lethal weapons, and videos camera were recovered from the murder accused on January 27, 2011.” (“Davis mapped Pakistan targets court told”, The Nation)

So, Davis’s GPS chip was being used to identify targets for drone attacks in the tribal region. Most likely, he was being assisted on the other end by recruits or members of the Tehreek-e-Taliban.

A lot of extravagant claims have been made about what Davis was up to, much of which is probably just speculation. One report which appeared on ANI news service is particularly dire, but produces little evidence to support its claims. Here’s an excerpt:

Double murder-accused U.S. official Raymond Davis has been found in possession of top-secret CIA documents, which point to him or the feared American Task Force 373 (TF373) operating in the region, providing Al-Qaeda terrorists with “nuclear fissile material” and “biological agents,” according to a report.

Russia’s Foreign Intelligence Service (SVR) is warning that the situation on the sub-continent has turned “grave” as it appears that open warfare is about to break out between Pakistan and the United States, The European Union Times reports… The most ominous point in this SVR report is “Pakistan’s ISI stating that top-secret CIA documents found in Davis’s possession point to his, and/or TF373, providing to al Qaeda terrorists “nuclear fissile material” and “biological agents”, which they claim are to be used against the United States itself in order to ignite an all-out war in order to re-establish the West’s hegemony over a Global economy that is warned is just months away from collapse,” the paper added. (“CIA Spy Davis was giving nuclear bomb material to Al Qaeda, says report”, ANI)

Although there’s no way to prove that this is false, it seems like a bit of a stretch. But that doesn’t mean that what Davis was up to shouldn’t be taken seriously. Quite the contrary. If Davis was working with Tehreek-e-Taliban, (as alleged in many reports) then we can assume that the war on terror is basically a ruse to advance a broader imperial agenda. According to Sify News, the president of Pakistan, Asif Ali Zardari, believes this to be the case. Here’s an excerpt:

Zalmay Khalilzad, the former U.S. envoy to Afghanistan, once brushed off Pakistan President Asif Ali Zardari’s claim, that the U.S. was “arranging” the (suicide) attacks by Pakistani Taliban inside his country, as ‘madness’, and was of the view that both Zardari and Afghan President Hamid Karzai, who believed in this U.S. conspiracy theory, were “dysfunctional” leaders.

The account of Zardari’s claim about the U.S.’ hand in the attacks has been elaborately reproduced by U.S. journalist Bob Woodward, on Page 116 of his famous book ‘Obama’s Wars,’ The News reported.

Woodward’s account goes like this: “One evening during the trilateral summit (in Washington, between Obama, Karzai and Zardari) Zardari had dinner with Zalmay Khalilzad, the 58-year-old former U.S. ambassador to Afghanistan, Iraq and the U.N., during the Bush presidency.

“Zardari dropped his diplomatic guard. He suggested that one of the two countries was arranging the attacks by the Pakistani Taliban inside his country: India or the U.S. Zardari didn’t think India could be that clever, but the US could. Karzai had told him the U.S. was behind the attacks, confirming the claims made by the Pakistani ISI.”

“Mr President,” Khalilzad said, “what would we gain from doing this? You explain the logic to me.”

“This was a plot to destabilize Pakistan, Zardari hypothesized, so that the U.S. could invade and seize its nuclear weapons. He could not explain the rapid expansion in violence otherwise. And the CIA had not pursued the leaders of the Pakistani Taliban, a group known as Tehreek-e-Taliban or TTP that had attacked the government. TTP was also blamed for the assassination of Zardari’s wife, Benazir Bhutto.” (“Pakistan President says CIA Involved in Plot to Destabilize Country and Seize Nukes”, Sify News)

Zardari’s claim will sound familiar to those who followed events in Iraq. Many people are convinced that the only rational explanation for the wave of bombings directed at civilians, was that the violence was caused by those groups who stood to gain from a civil war.

And who might that be?

Despite the Obama administration’s efforts to derail the investigation, the case against Davis is going forward. Whether he is punished or not is irrelevant. This isn’t about Davis anyway. It’s a question of whether the U.S. is working hand-in-hand with the very organizations that it publicly condemns in order to advance its global agenda. If that’s the case, then the war on terror is a fraud.

[End.]
__________

Mike Whitney lives in Washington state. He can be reached at fergiewhitney@msn.com.

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Categories: CIA, Mike Whitney, PAK, USA

MIKE WHITNEY: Obama to Teachers: “Drop Dead”

February 22, 2011 Comments off

The following column is reprinted with permission from Mike Whitney.
 

Obama to Teachers: “Drop Dead”
©  Mike Whitney
February 22, 2011

Teachers. These are the people who put Obama in office. They handed out the pamphlets, went from door to door, stuffed the envelopes, and manned the phone banks. They buttonholed people outside grocery stores, waved posters atop freeway overpasses, and organized neighborhood get-togethers. They spread the word, attended the rallies and drew whatever they could from their meager paychecks to support the man who promised change and inspired hope. They did everything a candidate could ask of his supporters and more. And what have they gotten in return? A bigger war in Afghanistan, a renewal of the Patriot Act, a porno-scanning system at the airports, more blank checks for Wall Street, and a lot of empty posturing about Guantanamo.

And when their pay and pensions and their jobs were on the line, Obama was no where to be found.

Poof! The vanishing president.

Name one thing that Obama has done for working people?

Health care? That fetid trillion dollar giveaway to big pharma?

That just doesn’t cut it.

Obama has called for a spending freeze on government workers pay for the next 5 years while renewing the $700 billion Bush tax cuts at the same time. That’s a feat that even Reagan couldn’t have managed without igniting a revolt in the ranks. But smooth-talking Obama pulled it off without a hitch. In fact, his devotees are more ga-ga over him than ever.

Two weeks ago, Obama wrote an op-ed for the Wall Street Journal promising to reduce “burdensome” regulations for his friends in big finance. He figured that the trillions they’d already been given wasn’t quite enough to keep them happy, so he decided he’d find more rules that he could eliminate.

Then he slithered over to the Chamber of Commerce to assure them that he’d do whatever he could to “change the tone” at the White House to help them increase profitability. Just days later, Obama delivered an entirely different message to striking Wisconsin teachers. He told them that everyone would have to “make sacrifices” to make up for state budget shortfalls. Everyone except his rich friends, that is.

Recently, Obama appointed bank tycoon William Daley as his new chief of staff, and GE’s “outsourcing” Jeffrey Immelt to lead his new jobs creation program. Then he finished off the month by throwing his support behind the latest labor-crushing free trade bill, this time with South Korea. According to the Oakland Business Journal: “The proposed trade deal with South Korea would cost 159,000 U.S. jobs over seven years and hurt some of the highest paying industries in the U.S., including motor vehicles and parts, electronics equipment and metal products, according to the Economic Policy Institute.” Big labor is against the bill. Obama is for it. What a surprise?

Obama’s new budget calls for big cuts to government subsidies for home heating oil for needy families, but allocates $5 million to anti-Chavez groups in Venezuela via the State Department. What makes this so ironic, is that Hugo Chavez has been providing hundreds of thousands of gallons of free heating oil to needy American families across the U.S. So, while the president of Venezuela is trying to make sure that poor people in America don’t freeze to death in the dark, Obama is doing whatever he can to make sure that they do.

Obama has abandoned any effort to reduce unemployment, lower tuition costs, increase welfare, minimize foreclosures, or decrease homelessness. If you are part of the growing number of working-poor in America, don’t except help from the Obama team. You’re outta luck.

This is from the World Socialist Web Site:

“Two and half years since the eruption of the financial crisis, more than 26 million workers cannot find a full-time job. State governments, under both Democrats and Republicans, are responding to budget deficits by closing schools, libraries, clinics and other public facilities, and carrying out attacks on state and municipal employees.

Meanwhile, Wall Street share values have fully recovered since the crash of 2008 and the corporations and their top executives are richer than ever. President Obama has refused to provide a penny of relief to workers losing their jobs, homes and life savings. Instead he has outlined plans to slash a trillion dollars from vitally needed social services, to pay for the bailout of Wall Street, the extension of the Bush era tax cuts for the rich and the Pentagon war machine. And this is only the beginning…

(In Wisconsin) workers are fighting for their very livelihoods. They cannot live with what amounts to a 20 percent pay cut and devastating cuts in public education and state universities for their children.” (“The struggle of Wisconsin workers enters a new stage“, World Socialist Web Site)

The strike has entered its second week and still no sign of Obama. Thousands of workers and students from across the state have braved the freezing temperatures and joined in the demonstrations while closing down much of the school system.

The entire country is watching. Many people are wondering how the GOP crackdown will affect their own jobs. They’re worried about their future and the future of the country.

Obama could simply fly into Madison, deliver a few words of support for the strikers, and assure himself of a landslide victory in 2012. But he won’t do that, because he’s not the man that people thought he was. He won’t lift a finger to help his friends even when they’re embroiled in the biggest fight of their lives. He won’t support the people who supported him.

Obama’s message to the teachers, “Drop dead!”

[End.]
__________

Mike Whitney lives in Washington state. He can be reached at fergiewhitney@msn.com.

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Categories: Mike Whitney, USA, VEN

MIKE WHITNEY: Why Another Financial Crash is Certain

February 8, 2011 Comments off

The following column is reprinted with permission from Mike Whitney.
 

Why Another Financial Crash is Certain
©  Mike Whitney
February 8, 2011

On August 9, 2007, an incident took place at a bank in France that touched-off a financial crisis that that would eventually wipe out more than $30 trillion in capital and thrust the world into the deepest slump since the Great Depression. The event was recounted in a speech by Pimco’s managing director Paul McCulley, at the 19th Annual Hyman Minsky Conference on the State of the U.S. and World Economies. Here’s an excerpt from McCulley’s speech:

If you have to pick a day for the Minsky Moment, it was August 9. And, actually, it didn’t happen here in the United States. It happened in France, when Paribas Bank (BNP) said that it could not value the toxic mortgage assets in three of its off-balance sheet vehicles, and that, therefore, the liability holders, who thought they could get out at any time, were frozen. I remember the day like my son’s birthday. And that happens every year. Because the unraveling started on that day. In fact, it was later that month that I actually coined the term “Shadow Banking System” at the Fed’s annual symposium in Jackson Hole.

It was only my second year there. And I was in awe, and mainly listened for most of the three days. At the end… I stood up and (paraphrasing) said, ‘What’s going on is really simple. We’re having a run on the Shadow Banking System and the only question is how intensely it will self-feed as its assets and liabilities are put back onto the balance sheet of the conventional banking system.’

BNP had been involved in credit intermediation, that is, it was exchanging bonds made up of mortgage-backed securities (MBS) for short-term loans in the repo market. It all sounds very complex, but it’s no different than what banks do when they take deposits from customers and then invest the money in long-term assets. (aka – “maturity transformation”) The only difference here was that these activities were not regulated, so no government agency was involved in determining the quality of the loans or making sure that the various financial institutions were sufficiently capitalized to cover potential losses. This lack of regulation turned out to have dire consequences for the global economy.

It took nearly a year from the time that sub-prime mortgages began to default en masse, until the secondary market (where these “toxic” bonds were traded) went into a nosedive. The problem was simple: No one knew whether the underlying mortgages were any good or not, so it became impossible to price the assets (MBS). This created, what Yale Professor Gary Gorton calls, the e coli problem. In other words, if even a small amount of meat is contaminated, millions of pounds of hamburger has to be recalled. That same rule applies to mortgage-backed securities. No one knew which MBS contained the bad loans, so the entire market froze and trillions of dollars in collateral began to fall in value.

Sub-prime was the spark that lit the fuse, but sub-prime wasn’t big enough to bring down the whole financial system. That would take bigger ructions in the shadow banking system. Here’s an excerpt from an article by Nomi Prins which explains how much money was involved:

Between 2002 and early 2008, roughly $1.4 trillion worth of sub-prime loans were originated by now-fallen lenders like New Century Financial. If such loans were our only problem, the theoretical solution would have involved the government subsidizing these mortgages for the maximum cost of $1.4 trillion. However, according to Thomson Reuters, nearly $14 trillion worth of complex-securitized products were created, predominantly on top of them, precisely because leveraged funds abetted every step of their production and dispersion. Thus, at the height of federal payouts in July 2009, the government had put up $17.5 trillion to support Wall Street’s pyramid Ponzi system, not $1.4 trillion.” (“Shadow Banking”, Nomi Prins, The American Prospect)

Shadow banking emerged so that large cash-heavy financial institutions would have a place to park their money short-term and get the best possible return. For example, let’s say Intel is sitting on $25 billion in cash. It can deposit the money with a financial intermediary, such as Morgan Stanley, in exchange for collateral (aka MBS or ABS), and earn a decent return on its money. But if a problem arises and the quality of the collateral is called into question, then the banks (Morgan Stanley, in this case) are forced to take bigger and bigger haircuts which can send the system into a nosedive. That’s what happened in the summer of 2007. Investors discovered that many of the sub-primes were based on fraud, so billions of dollars were quickly withdrawn from money markets and commercial paper, and the Fed had to step in to keep the system from collapsing.

Regulations are put in place to see that the system runs smoothly and to protect the public from fraud. But banking without rules is more profitable, so industry leaders and lobbyists have tried to block the efforts at reform. And, they have largely succeeded. Dodd-Frank – the financial reform act – is riddled with loopholes and doesn’t really resolve the central issues of loan quality, additional capital, or risk retention. Banks are still free to issue bogus mortgages to unemployed applicants with bad credit, just as they were before the meltdown. And, they can still produce securitized debt instruments without retaining even a meager 5 per cent of the loan’s value. (This issue is still being contested) Also, government agencies cannot force financial institutions to increase their capital even though a slight downturn in the market could wipe them out and cause severe damage to the rest of the system. Wall Street has prevailed on all counts and now the window for re-regulating the system has passed.

President Barack Obama understands the basic problem, but he also knows that he won’t be reelected without Wall Street’s help. That’s why he promised to further reduce “burdensome” regulations in the Wall Street Journal just two weeks ago. His op-ed was intended to preempt the release of the Financial Crisis Inquiry Commission’s (FCIC) report, which was expected to make recommendations for strengthening existing regulations. Obama torpedoed that effort by coming down on the side of big finance. Now, it’s only a matter of time before another crash.

Here’s an excerpt from a special report on shadow banking by the Federal Reserve Bank of New York:

At the eve of the financial crisis, the volume of credit intermediated by the shadow banking system was close to $20 trillion, or nearly twice as large as the volume of credit intermediated by the traditional banking system at roughly $11 trillion. Today, the comparable figures are $16 and $13 trillion, respectively… The weak-link nature of wholesale funding providers is not surprising when little capital is held against their asset portfolios and investors have zero tolerance for credit losses.” (“Shadow Banking”, Federal Reserve Bank of New York Staff Report)

So, between $4 to $7 trillion vanished in a flash after Lehman Brothers blew up. How many millions of jobs were lost because of inadequate regulation? How much was trimmed from output, productivity, and GDP? How many people are on now food stamps or living in homeless shelters or struggling through foreclosure because unregulated financial institutions were allowed to carry out credit intermediation without government supervision or oversight?

Ironically, the New York Fed doesn’t even try to deny the source of the problem; deregulation. Here’s what they say in the report: “Regulatory arbitrage was the root motivation for many shadow banks to exist.”

What does that mean? It means that Wall Street knows that it’s easier to make money by eliminating the rules… the very rules that protect the public from the predation of avaricious speculators.

The only way to fix the system is to regulate all financial institutions that act like banks. No exceptions.

[End.]
__________

Mike Whitney lives in Washington state. He can be reached at fergiewhitney@msn.com.

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Categories: FRA, Mike Whitney, USA, WORLD