Watchman Newsletter

'Netanyahu refused to nix 'two states''

The Jerusalem Post (Link) (March 28, 2009)

Prime Minister-designate Binyamin Netanyahu refused the demands of two coalition partners to insert a clause against a Palestinian state in the coalition agreement, sources close to Netanyahu told The Jerusalem Post on Saturday night. They added that there is no great substantive gap between Netanyahu and the international community regarding the issue.

According to the sources, while Netanyahu has not yet uttered the phrase "two states for two peoples," he has made it clear that he doesn't want to govern a single Palestinian, though he doesn't want them to have powers that could threaten Israel.

EXCLUSIVE: Hezbollah uses Mexican drug routes into U.S.

The Washington Times (Link) - Sara A. Carter (March 27, 2009)

Hezbollah is using the same southern narcotics routes that Mexican drug kingpins do to smuggle drugs and people into the United States, reaping money to finance its operations and threatening U.S. national security, current and former U.S. law enforcement, defense and counterterrorism officials say.

The Iran-backed Lebanese group has long been involved in narcotics and human trafficking in South America's tri-border region of Paraguay, Argentina and Brazil. Increasingly, however, it is relying on Mexican narcotics syndicates that control access to transit routes into the U.S.

A World Currency Moves Nearer After Tim Geithner's Slip

Telegraph UK (Link) (March 27, 2009)

US Treasury Secretary Tim Geithner confessed on Wednesday that he had not read the plans by China's central bank governor for a "super-sovereign reserve currency" run by the International Monetary Fund, but nevertheless let slip that Washington was "open" to the idea. Whoops.

This is how matters quickly escalate in geo-finance. China's suggestion – backed by Russia, Brazil, and India, and clearly aimed at breaking US dollar hegemony – is making its way onto the agenda of the G20 Summit next week. 'Dollar-dämmerung' no longer looks so far-fetched.

China's paper, by Governor Zhou Xiaochuan, is couched in understated language – more a 'thought experiment' than a declaration of monetary war. His ideas could be mistaken for the musings of an academic theorist. Nobody should be fooled by decorum.

U.N. 'Climate Change' Plan Would Likely Shift Trillions to Form New World Economy

Fox News (Link) - George Russell (March 27, 2009)

A United Nations document on "climate change" that will be distributed to a major environmental conclave next week envisions a huge reordering of the world economy, likely involving trillions of dollars in wealth transfer, millions of job losses and gains, new taxes, industrial relocations, new tariffs and subsidies, and complicated payments for greenhouse gas abatement schemes and carbon taxes — all under the supervision of the world body.

Those and other results are blandly discussed in a discretely worded United Nations "information note" on potential consequences of the measures that industrialized countries will likely have to take to implement the Copenhagen Accord, the successor to the Kyoto Treaty, after it is negotiated and signed by December 2009. The Obama administration has said it supports the treaty process if, in the words of a U.S. State Department spokesman, it can come up with an "effective framework" for dealing with global warming.

Israel runs successful 'Iron Dome' tests

The Jerusalem Post (Link) (March 26, 2009)

The Iron Dome anti-rocket shield passed a critical test in the past 48 hours, the Defense Ministry said on Thursday evening, in a message that will be welcomed by residents of the rocket-battered western Negev.

During the test, a number of rockets were launched, "of the same type that were fired in recent years at Israel," and the Iron Dome system responded "accordingly," the Defense Ministry said, using terminology indicating a successful interception of the projectiles.

Global finance structures must be revamped, says UN expert panel

United Nations (Link) (March 26, 2009)

International finance structures must be drastically overhauled in the face of the current global economic crisis, a panel of experts convened by the United Nations General Assembly said today, calling on wealthier nations to direct one per cent of their economic stimulus packages to help developing countries address poverty.

A coordinated approach – bringing together not just the so-called Group of Eight (G-8) or even Group of 20 (G-20) nations, but the “G-192” representing all members of the Assembly – is needed to pull the world out of the recession, according to the recommendations of the Commission of Experts on Reforms of International Finance and Economic Structures.

PM-designate: I'll continue peace talks

The Jerusalem Post (Link) - Sharon Wrobel & Herb Keinon (March 25, 2009)

A day after bringing the Labor Party into his coalition, Prime Minister-designate Binyamin Netanyahu said Wednesday he will "negotiate with the Palestinian Authority for peace."

The "Palestinians should understand that they have in our government a partner for peace, prosperity and rapid economic development," Netanyahu said, speaking at the STEP Jerusalem Wealth Management Conference.

Security, prosperity and peace were all intertwined, he said. Peace is a "common and enduring goal for all Israelis and Israeli governments," he continued. "An Israeli-Palestinian economic relationship is a strong foundation for peace," he said. "The economic track is not a substitute for political negotiations - it is complimentary."

Netanyahu said that he came to the conclusion, after meeting with Middle East Quartet envoy Tony Blair last week, that Israel could lift some bureaucratic obstacles in the West Bank without compromising security. Blair is trying to develop Palestinian economic and security capacity in the West Bank.

While not saying he believed in a two-state solution, Netanyahu repeated his position that his concept of "economic peace" would not replace diplomatic negotiations, but would run in parallel with them.

EU rejects proposal for new reserve currency

EU Observer (Link) - AP (March 25, 2009)

The EU's economy commissioner Joaquin Almunia rejected a Chinese proposal for a new reserve currency on Tuesday (24 March), saying he felt the dollar would remain the world's reserve currency for the foreseeable future.

Mr Almunia said he didn't envisage: "major structural changes in the role the dollar plays today as a major reserve currency," following Monday's call by China's central bank governor, Zhou Xiaochuan, to create a new reserve currency "that is disconnected from individual currencies."

"Everybody agrees also that the [main] present world reserve currency, the dollar, is there and will continue to be there for a long period of time," said Mr Almunia after a meeting of commissioners in Strasbourg reports the Associated Press.

EU president: U.S. stimulus is 'the road to hell' for Europe

The Leaf Chronicle (Link) - AP - Aoife White (March 26, 2009)

The head of the European Union slammed President Barack Obama's plan to spend nearly $2 trillion to push the U.S. economy out of recession as "the road to hell" that EU governments must avoid.

The blunt comments by Czech Prime Minister Mirek Topolanek to the European Parliament on Wednesday highlighted simmering European differences with Washington ahead of a key summit next week on fixing the world economy.

It was the strongest pushback yet from a European leader as the 27-nation bloc bristles from U.S. criticism that it is not spending enough to stimulate demand.

On Wall Street, Talk of Trust and Civil War

The Wall Street Journal (Link) -  Annalena Lobb & Heidi N. Moore (March 25, 2009)

Finance executives expressed anger and betrayal at Washington's latest anti-Wall Street rhetoric during Tuesday's sessions of the Future of Finance Initiative, a conference hosted by The Wall Street Journal.

The conflict suggested that the lines of communication between government and the private sector remain limited just as government is hoping to expand cooperation with private investors. Those tensions flared over the last week, as the U.S. House passed a bill taxing bonuses by 90% for banks and other companies receiving large government capital injections.

"Washington and Wall Street are the equivalent of Gettysburg and Antietam right now," said Glenn Hutchins, co-chief executive of private-equity firm Silver Lake.

"To point the finger at one group means, No. 1, you're not understanding the problem, two, you're stretching our social fabric thinly, and you're throwing the baby out with the bathwater," Mr. Hutchins noted. "Trust goes both ways."

U.S. Dollar in the Crosshairs Ahead of G-20 Summit

CNS News (Link) (March 25, 2009)

In the run-up to next week’s G-20 summit in London, developing countries led by China and Russia are stepping up calls for the U.S. dollar to be pushed aside as the main global reserve currency.

China’s central bank governor, Zhou Xiaochuan, suggested this week that reforms to the international monetary system include the long-term goal of an international reserve currency not connected to an individual nation. China is the biggest holder of U.S. dollar assets and is concerned about the currency’s volatility.

A few days earlier, the Russian government put forward among its G-20 summit priorities a proposal for the International Monetary Fund (IMF) to explore the possibility of creating a “super reserve currency accepted by the whole of the international community.” Russia said the proposal had broad support among other emerging economic powers, including Brazil, India and South Korea.

Geithner plan will rob American taxpayers

Reuters (Link) - Susan Fenton and Deborah Kan (March 24, 2009)

The U.S. government plan to rid banks of toxic assets will rob American taxpayers by exposing them to too much risk and is unlikely to work as long as the economy remains weak, Nobel Prize-winning economist Joseph Stiglitz said on Tuesday.

"The Geithner plan is very badly flawed," Stiglitz told Reuters in an interview during a Credit Suisse Asian Investment Conference in Hong Kong.

U.S. Treasury Secretary Timothy Geithner's plan to wipe up to US$1 trillion in bad debt off banks' balance sheets, unveiled on Monday, offered "perverse incentives," Stiglitz said. The U.S. government is basically using the taxpayer to guarantee against downside risk on the value of these assets, while giving the upside, or potential profits, to private investors, he said.

Czech gov't collapses over handling of economic crisis

The Jerusalem Post (Link) - AP (March 24, 2009)

The Czech government collapsed Tuesday after losing a parliamentary no-confidence vote over its handling of the economic crisis. It was a huge embarrassment for Prime Minister Mirek Topolanek, coming just days before a planned visit by President Barack Obama and midway through the Czech Republic's six-month European Union presidency.

The lower house of Parliament voted 101-96 to declare no confidence in the three-party coalition government, after four lawmakers broke rank with their parties and voted with the opposition. Three legislators were absent from the vote.

It was the first time a government has been ousted by parliament since the country came to existence after the 1993 split of Czechoslovakia.

Geithner Asks Congress for Broad Power to Seize Firms

The Washington Post (Link) - Binyamin Appelbaum, David Cho and Debbi Wilgoren (March 24, 2009)

Treasury Secretary Timothy F. Geithner today told Congress the administration will seek unprecedented power to seize non-bank financial companies whose collapse could jeopardize the economy, a move Geithner said would have allowed the government to bail out insurance giant American International Group at a far lower cost to taxpayers.

The government at present has the authority to seize only banks.

Allowing the Treasury Department to take over a broader range of companies, such as large insurers, investment firms and hedge funds, would mark a significant shift from the existing model of financial regulation, which relies on independent agencies that are shielded from the political process. The Treasury secretary, a member of the president’s Cabinet, would exercise the new powers in consultation with the White House, the Federal Reserve and other regulators.

“Our system permitted a scale of risk taking that has caused grave damage to the fortunes of all Americans,” Geithner said in testimony before the House Financial Services Committee.” . . . We must create a new resolution authority so that the federal government has the tools it needs to unwind an institution of the size and complexity of AIG.”

Dear A.I.G., I Quit!

The New York Times (Link) (March 24, 2009)

The following is a letter sent on Tuesday by Jake DeSantis, an executive vice president of the American International Group’s financial products unit, to Edward M. Liddy, the chief executive of A.I.G.

DEAR Mr. Liddy,

It is with deep regret that I submit my notice of resignation from A.I.G. Financial Products. I hope you take the time to read this entire letter. Before describing the details of my decision, I want to offer some context:

I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage.

Alaska volcano Mount Redoubt erupts 3 times

The Jerusalem Post (Link) (March 23, 2009)

Alaska's Mount Redoubt volcano has begun erupting. Geologists at the Alaska Volcano Observatory say the volcano erupted three times late Sunday and early Monday, with the largest eruption sending a plume of smoke some 15,000 meters above sea level.

Mount Redoubt is roughly 160 kilometers southwest of Anchorage. Geophysicist John Power says "this is a fairly large eruption, close to the larger cities in Alaska." He says no cities have yet reported any ash fall from the volcano, but noted that it's still early.

Geologists say seismic activity around the volcano has been intense in recent days, and they expect that the volcano would blow soon. Power says Mount Redoubt last erupted nearly 20 years ago.

Israel's Netanyahu inks deal with religious party

Breitbart (Link) (March 23, 2009)

Israeli prime minister-designate Benjamin Netanyahu has concluded his second coalition deal with the ultra-Orthodox Shas party, officials said on Monday. As part of the deal, the religious party will receive four portfolios in the new cabinet, including interior, housing and religious affairs. The fourth minister from the party will be a minister without portfolio.

The move brings Netanyahu, the leader of the right-wing Likud party, one step closer to forming a government following last week's signing of a deal with the ultra-nationalist Yisrael Beitenu party led by firebrand Avigdor Lieberman.

Netanyahu: My gov't will honor all past int'l agreements

The Jerusalem Post (Link) - Gil Hoffman (March 23, 2009)

A crucial Labor party convention kicked off at Tel Aviv's Exhibition Grounds late Tuesday afternoon during which a decision will be made on joining a Likud-led national unity government.

Earlier Tuesday, Labor chairman Ehud Barak and Prime Minister-designate Binyamin Netanyahu and came to an agreement on a number of issues, apparently narrowing the gaps which would prevent Labor from joining the coalition.

According to Army Radio, Netanyahu promised that his government would honor all previous international agreements - including those made with the Palestinian Authority. Further, the Likud leader promised that his coalition would work towards a peace agreement with the Palestinian people, and in the region as a whole, the radio station reported.

Will the Jews return to Temple Mount?

WorldNet Daily (Link) (March 22, 2009)

A prominent U.S. rabbi recently ascended the Temple Mount – Judaism's most revered site – stirring a quiet debate among some within the Jewish religious community about whether Jews should be permitted to enter the mount.

Some rabbis forbid Jewish entry, while others permit it. Those who oppose ascending the mount may indirectly contribute to the current Islamic consolidation of the site, argued Rabbi Moshe Dovid Tendler, a Jewish law and ethics professor and top rabbinic scholar.

"The reality is that slowly the area has become without Jews," Tendler told WND. "The claim of the Arabs that it belongs to them is being affirmed by our (Jewish) absence."

A video of Tendler visiting the Temple Mount in January was released this past week on YouTube by the Temple Institute, a nonprofit organization promoting awareness of the mount. The video can be seen below:

Fed's secrecy policy 3 years old

WorldNet Daily (Link) (March 22, 2009)

As America's economy continues in freefall, tomorrow marks an auspicious three-year anniversary – the day the Federal Reserve announced, with little fanfare, its decision to stop reporting to the public the M3 money supply, the broadest measure of three standards of measurement.

Federal Reserve is the non-government agency designated by Congress to control the nation's money supply, which directly impacts the value of the dollar and every investment held by Americans. Since 2006, Americans have seen their investments plummet in value and witnessed the shrinking buying power of their earnings.

Why did the Fed make that decision three years ago? What was its rationale? The justification for the secrecy by the organization that prints money was cost. By not producing those numbers for the public, the Fed would save about $1.5 million annually.